Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 26, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | DENTSPLY SIRONA Inc. | |
Entity Central Index Key | 818,479 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Trading Symbol | XRAY | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 227,438,501 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 956.1 | $ 900.5 |
Cost of products sold | 442 | 408.5 |
Gross profit | 514.1 | 492 |
Selling, general and administrative expenses | 435.2 | 404.7 |
Restructuring and other costs | 10.2 | 3.1 |
Operating income | 68.7 | 84.2 |
Other income and expenses: | ||
Interest expense | 8.6 | 9.3 |
Interest income | (0.6) | (0.7) |
Other expense (income), net | (34.1) | (1) |
Income before income taxes | 94.8 | 76.6 |
Provision for income taxes | 13.7 | 16.9 |
Net income | 81.1 | 59.7 |
Less: Net loss attributable to noncontrolling interests | (0.1) | (0.1) |
Net income attributable to Dentsply Sirona | $ 81.2 | $ 59.8 |
Net income per common share attributable to Dentsply Sirona: | ||
Basic (in dollars per share) | $ 0.36 | $ 0.26 |
Diluted (in dollars per share) | $ 0.35 | $ 0.26 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 227.2 | 230.1 |
Diluted (in shares) | 229.9 | 234 |
Dividends declared per common share (in dollars per share) | $ 0.0875 | $ 0.0875 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 81.1 | $ 59.7 |
Other comprehensive income, net of tax: | ||
Foreign currency translation gain | 65.7 | 49.7 |
Net loss on derivative financial instruments | (12) | (3.3) |
Net unrealized holding gain on available for sale securities | (44.3) | 0 |
Pension liability gain | 1.2 | 1.2 |
Total other comprehensive income, net of tax | 10.6 | 47.6 |
Total comprehensive income | 91.7 | 107.3 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0.5 | (0.2) |
Comprehensive income attributable to Dentsply Sirona | $ 91.2 | $ 107.5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 317.1 | $ 320.6 |
Accounts and notes receivables-trade, net | 670.4 | 746.2 |
Inventories, net | 696.6 | 623.1 |
Prepaid expenses and other current assets, net | 316.4 | 312.6 |
Total Current Assets | 2,000.5 | 2,002.5 |
Property, plant and equipment, net | 888.2 | 876 |
Identifiable intangible assets, net | 2,811.4 | 2,800.7 |
Goodwill, net | 4,573.2 | 4,539.2 |
Other noncurrent assets, net | 99.5 | 156.1 |
Total Assets | 10,372.8 | 10,374.5 |
Current Liabilities: | ||
Accounts payable | 286.8 | 284.4 |
Accrued liabilities | 531.7 | 585.8 |
Income taxes payable | 54.3 | 54.2 |
Notes payable and current portion of long-term debt | 22.6 | 30.1 |
Total Current Liabilities | 895.4 | 954.5 |
Long-term debt | 1,645.5 | 1,611.6 |
Deferred income taxes | 641.4 | 718 |
Other noncurrent liabilities | 485.3 | 462.5 |
Total Liabilities | 3,667.6 | 3,746.6 |
Equity: | ||
Preferred stock, $1.00 par value; 0.25 million shares authorized; no shares issued | 0 | 0 |
Common stock, $.01 par value; 400.0 million shares authorized and 264.5 million shares issued at March 31, 2018 and December 31, 2017, respectively; 227.4 million and 226.8 million shares issued at March 31, 2018 and December 31, 2017, respectively; 227.4 million and 226.8 million share outstanding at March 31, 2018 and December 31, 2017, respectively | 2.6 | 2.6 |
Capital in excess of par value | 6,531.7 | 6,543.9 |
Retained earnings | 2,375.9 | 2,316.2 |
Accumulated other comprehensive loss | (281) | (291) |
Treasury stock, at cost, 37.1 million and 37.7, million shares at March 31, 2018 and December 31, 2017, respectively | (1,936.1) | (1,955.4) |
Total Dentsply Sirona Equity | 6,693.1 | 6,616.3 |
Noncontrolling interests | 12.1 | 11.6 |
Total Equity | 6,705.2 | 6,627.9 |
Total Liabilities and Equity | $ 10,372.8 | $ 10,374.5 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
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) | 227,400,000 | 226,800,000 |
Treasury stock, shares (in shares) | 37,100,000 | 37,700,000 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Millions | Total | Total Dentsply Sirona Equity | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect on adoption of new accounting pronouncement | $ 0 | $ 1 | $ (1) | |||||
Beginning Balance at Dec. 31, 2016 | 8,125.9 | $ 8,114.3 | $ 2.6 | 6,516.7 | 3,948 | $ (705.7) | $ (1,647.3) | $ 11.6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 59.7 | 59.8 | 59.8 | (0.1) | ||||
Other comprehensive income | 47.6 | 47.7 | 47.7 | (0.1) | ||||
Exercise of stock options | 29.4 | 29.4 | 4.9 | 24.5 | ||||
Stock based compensation expense | 10.8 | 10.8 | 10.8 | |||||
Funding of Employee Stock Ownership Plan | 6.6 | 6.6 | 3.3 | 3.3 | ||||
Treasury shares purchased | (84.6) | (84.6) | (84.6) | |||||
RSU distributions | (11.6) | (11.6) | (20.7) | 9.1 | ||||
RSU dividends | 0 | 0.2 | (0.2) | |||||
Cash dividends | (20.2) | (20.2) | (20.2) | |||||
Ending Balance at Mar. 31, 2017 | 8,163.6 | 8,152.2 | 2.6 | 6,516.2 | 3,986.4 | (658) | (1,695) | 11.4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative effect on adoption of new accounting pronouncement | ASU 2014-09 | (6) | (6) | (6) | |||||
Cumulative effect on adoption of new accounting pronouncement | ASU 2016-16 | (2.7) | (2.7) | (2.7) | |||||
Cumulative effect on adoption of new accounting pronouncement | ASU 2018-02 | 7.6 | 7.6 | 7.6 | |||||
Beginning Balance at Dec. 31, 2017 | 6,627.9 | 6,616.3 | 2.6 | 6,543.9 | 2,316.2 | (291) | (1,955.4) | 11.6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 81.1 | 81.2 | 81.2 | (0.1) | ||||
Other comprehensive income | 10.6 | 10 | 10 | 0.6 | ||||
Exercise of stock options | 7.6 | 7.6 | (1.8) | 9.4 | ||||
Stock based compensation expense | 9.3 | 9.3 | 9.3 | |||||
RSU distributions | (10) | (10) | (19.9) | 9.9 | ||||
RSU dividends | 0 | 0.2 | (0.2) | |||||
Cash dividends | (20.2) | (20.2) | (20.2) | |||||
Ending Balance at Mar. 31, 2018 | $ 6,705.2 | $ 6,693.1 | $ 2.6 | $ 6,531.7 | $ 2,375.9 | $ (281) | $ (1,936.1) | $ 12.1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 81.1 | $ 59.7 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 33.3 | 30.9 |
Amortization of intangible assets | 49.9 | 45.2 |
Amortization of deferred financing costs | 0.7 | 0.7 |
Deferred income taxes | (16.8) | 9.8 |
Stock based compensation expense | 9.3 | 10.8 |
Restructuring and other costs - non-cash | 3.3 | 0.6 |
Other non-cash expense/(income) | 14 | (14.4) |
Loss on disposal of property, plant and equipment | 0.5 | 0.3 |
Gain on sale of equity security | (44.1) | 0 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts and notes receivable-trade, net | 87.5 | 46.2 |
Inventories, net | (64.7) | (38.3) |
Prepaid expenses and other current assets, net | (5.6) | (9.2) |
Other noncurrent assets, net | (2.9) | (14.4) |
Accounts payable | (3.9) | 23.4 |
Accrued liabilities | (77.4) | (36) |
Income taxes | (14.1) | (31.4) |
Other noncurrent liabilities | 5 | (1.4) |
Net cash provided by operating activities | 55.1 | 82.5 |
Cash flows from investing activities: | ||
Capital expenditures | (35.8) | (31.1) |
Cash paid for acquisitions of businesses and equity investments, net of cash acquired | (6.7) | (9.1) |
Cash received on derivatives contracts | 0 | 2.4 |
Cash paid on derivatives contracts | (2.4) | 0 |
Expenditures for identifiable intangible assets | (3.3) | (4.8) |
Purchase of short-term investments | 0 | (0.1) |
Proceeds from sale of property, plant and equipment, net | 3 | 1.6 |
Net cash used in investing activities | (45.2) | (41.1) |
Cash flows from financing activities: | ||
(Decrease) increase in short-term borrowings | (7.8) | 1.3 |
Cash paid for treasury stock | 0 | (77.9) |
Cash dividends paid | (19.8) | (18) |
Proceeds from long-term borrowings | 0.1 | 3 |
Repayments on long-term borrowings | (0.2) | (5.4) |
Proceeds from exercised stock options | 8.3 | 29.4 |
Net cash used in financing activities | (19.4) | (67.6) |
Effect of exchange rate changes on cash and cash equivalents | 6 | 5.6 |
Net decrease in cash and cash equivalents | (3.5) | (20.6) |
Cash and cash equivalents at beginning of period | 320.6 | 383.9 |
Cash and cash equivalents at end of period | $ 317.1 | $ 363.3 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES 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”). The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by US GAAP. 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 most recent Form 10-K for the year ended December 31, 2017 . 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 for the year ended December 31, 2017 , except as may be indicated below. Revenue Recognition Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied; generally this occurs with the transfer of risk and/or control of Dental and Healthcare Consumables products (“consumable” products), Dental Technology products (“technology” products), or Dental Equipment products (“equipment” products). Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Sales, value add and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. For most of consumable, technology and equipment products, the Company transfers control and recognizes a sale when products are shipped from the manufacturing facility or warehouse to the customer (distributors and direct to dentists). For contracts with customers that contain destination shipping terms, revenue is not recognized until risk has transferred and the goods are delivered to the agreed upon destination. The amount of consideration received and revenue recognized varies with changes in marketing incentives (e.g., discounts, rebates, free goods) and returns offered to customers and their customers. When the Company gives customers the right to return eligible products and receive credit, returns are estimated based on an analysis of historical experience. However, returns of products, excluding warranty related returns, are infrequent and insignificant. The Company adjusts the estimate of revenue at the earlier of when the most likely amount of consideration can be estimated, the amount expected to be received changes, or when the consideration becomes fixed. Consideration received from customers in advance of revenue recognition is classified as deferred revenue. Depending on the terms of the arrangement, the Company will defer the recognition of a portion of the consideration received when performance obligations are not yet satisfied (e.g., extended maintenance/service contracts, software and licenses, customer loyalty points and coupon programs). The Company uses an observable price, typically average selling price, to determine the stand-alone selling price for separate performance obligations. The Company determines the stand-alone selling price, based on Company geographic sales locations’ database of pricing and discounting practices for the specific product or service when sold separately, and utilizes this data to arrive at average selling prices by product. Revenue is then allocated proportionately, based on the determined stand-alone selling price, to the unsatisfied performance obligation, which is deferred until satisfied. At March 31, 2018, the Company had $21.9 million of deferred revenue recorded in Accrued liabilities on the Consolidated Balance Sheets. The Company expects to recognize significantly all of the deferred revenue within the next twelve months. The Company has elected to account for shipping and handling activities as a fulfillment cost within the cost of products sold, and records shipping and handling costs collected from customers in net sales. The Company has adopted two practical expedients: the “right to invoice” practical expedient, which allows us to recognize revenue in the amount of the invoice when it corresponds directly with the value of performance completed to date; and relief from considering the existence of a significant financing component when the payment for the good or service is expected to be one year or less. The Company offers discounts to its customers and distributors if certain conditions are met. Discounts are primarily based on the volume of products purchased or targeted to be purchased by the customer. Discounts are deducted from revenue at the time of sale or when the discount is offered, whichever is later. The Company estimates volume discounts based on an individual customer’s historical and estimated future product purchases. Certain of the Company’s customers are offered cash rebates based on targeted sales increases. The Company estimates rebates based on the forecasted performance of a customer and their expected level of achievement within the rebate programs. In accounting for these rebate programs, the Company records an accrual and reduces sales ratably as sales occur over the rebate period. The Company updates the accruals for these rebate programs as actual results and updated forecasts impact the estimated achievement for customers within the rebate programs. A portion of the Company’s net sales is comprised of sales of precious metals generated through its precious metal dental alloy product offerings. As the precious metal content of the Company’s sales is largely a pass-through to customers, the Company uses its cost of precious metal purchased as a proxy for the precious metal content of sales, as the precious metal content of sales is not separately tracked and invoiced to customers. The Company believes that it is reasonable to use the cost of precious metal content purchased in this manner since precious metal alloy sale prices are typically adjusted when the prices of underlying precious metals change. Accounts and Notes Receivable The Company records a provision for doubtful accounts, which is included in Selling, general and administrative expenses on the Consolidated Statements of Operations. Accounts and notes receivables – trade, net are stated net of allowances for doubtful accounts and trade discounts, which were $ 25.0 million at March 31, 2018 and $ 22.4 million at December 31, 2017 . Marketable Securities During the three months ended March 31, 2018, the Company sold its direct investment in the DIO Corporation (“DIO”) for $54.1 million , resulting in a gain of $44.1 million . At December 31, 2017, the Company had recorded an unrealized gain of $45.0 million in accumulated other comprehensive income. This gain was transferred out of Accumulated other comprehensive loss (“AOCI”), and recorded in Other expense (income), net on the Consolidated Statements of Operations. The fair value of the direct investment at December 31, 2017 was $54.4 million . Income Taxes The Company has accounted for the tax effects of the Tax Cuts and Jobs Act, enacted on December 22, 2017, on a provisional basis. At December 31, 2017, the accounting for certain income tax effects was incomplete, but the Company determined reasonable estimates for those effects which were included in the financial statements. The Company expects to complete the accounting during 2018 in accordance with the one year measurement period. Recently Adopted Accounting Pronouncements Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”, as amended (Topic 606, commonly referred to as ASC 606) to all contracts using the modified retrospective method. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Most of the Company’s sales revenue continues to be recognized when products are shipped from manufacturing facilities. For certain customer and dealer incentive programs, such as coupons, customer loyalty and free goods, the Company recognizes the proportionate revenue and cost of product when the incentives are shipped or awarded. Prior to adoption of ASC 606, costs for these types of programs were recognized when triggering events occurred. For contracts with customers where performance occurs over time, such as software sales, the Company recognizes revenue ratably over the performance period. The new revenue standard also provided additional guidance that resulted in reclassifications to or from Net sales, Cost of products sold, Selling, general and administrative expenses, and the resultant change in (benefit) provision for income taxes. The cumulative effect of the changes made on the Consolidated Balance Sheets at December 31, 2017 for the adoption of ASC 606, is as follows: (in millions) Consolidated Balance Sheets Item December 31, 2017 As Reported Balance Adoption of ASC 606 January 1, 2018 Revised Balance Assets Accounts and notes receivable-trade, net $ 746.2 $ 0.2 $ 746.4 Inventory, net 623.1 (0.3 ) 622.8 Prepaid expense and other current assets, net 312.6 1.9 314.5 Liabilities and Equity Accrued liabilities 585.8 9.9 595.7 Income taxes payable 54.2 (2.1 ) 52.1 Retained earnings 2,316.2 (6.0 ) 2,310.2 The impact of adoption of the new revenue recognition standard on the Company’s Consolidated Statements of Operations and Consolidated Balance Sheets is as follows: (in millions) Three Months Ended March 31, 2018 Consolidated Statements of Operations Item As Reported Balance Balances Without Adoption of ASC 606 Effect of Change Increase/(Decrease) Net sales $ 956.1 $ 954.0 $ 2.1 Cost of products sold 442.0 438.9 3.1 Selling, general and administrative expenses 435.2 435.8 (0.6 ) Provision for income taxes 13.7 13.8 (0.1 ) Net income attributable to Dentsply Sirona 81.2 81.5 (0.3 ) (in millions) Balance at March 31, 2018 Consolidated Balance Sheets Item As Reported Balance Balances Without Adoption of ASC 606 Effect of Change Increase/(Decrease) Assets Accounts and notes receivables-trade, net $ 670.4 $ 670.3 $ 0.1 Inventories, net 696.6 696.9 (0.3 ) Prepaid expenses and other current assets, net 316.4 315.2 1.2 Liabilities and Equity Accrued liabilities 531.7 522.2 9.5 Income taxes payable 54.3 56.5 (2.2 ) Retained earnings 2,375.9 2,382.2 (6.3 ) In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” This accounting standard seeks to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current US GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to a third party, which is an exception to the principle of comprehensive recognition of current and deferred income taxes in US GAAP. ASU No. 2016-16 eliminates this exception. The amendments in this update should be applied through the modified retrospective method with a cumulative-effect adjustment directly to retained earnings. The Company adopted this accounting standard during the three months ended March 31, 2018. Upon adoption, the Company made the following reclassification: (in millions) Consolidated Balance Sheets Item December 31, 2017 As Reported Balance Adoption of ASU 2016-16 Increase/(Decrease) January 1, 2018 Revised Balance Assets Prepaid expenses and other current assets, net $ 312.6 $ (5.6 ) $ 307.0 Other noncurrent assets, net 156.1 (73.1 ) 83.0 Liabilities and Equity Deferred income taxes 718.0 (76.0 ) 642.0 Retained earnings 2,316.2 (2.7 ) 2,313.5 In March 2017, the FASB issued ASU No. 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This newly issued accounting standard is primarily intended to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The amendments in this update require an employer to report the service cost component of net periodic benefit cost in operating income, while the interest cost, amortization, return on assets and any settlement or curtailment expense will be reported below operating income. More specifically, the service cost will be reported in the same line item as other compensation costs arising from the services rendered by the pertinent employee during the period. The amendments in this update are required for annual and interim periods beginning after December 15, 2017, and should be applied retrospectively for the presentation of the components of net periodic benefit cost and net periodic postretirement benefit cost in the income statement. The amendment allows a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The Company adopted this accounting standard during the three months ended March 31, 2018, and applied the practical expedient upon adoption. The impact of adopting this standard, by financial statement line item, is reflected below: (in millions) Consolidated Statements of Operations Item March 31, 2017 As Reported Adoption of 2017-07 Increase/(Decrease) March 31, 2017 Revised Cost of products sold $ 408.5 $ (0.5 ) $ 408.0 Gross profit 492.0 0.5 492.5 Selling, general and administrative expense 404.7 (1.7 ) 403.0 Operating income 84.2 2.2 86.4 Other expense (income), net (1.0 ) 2.2 1.2 In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This newly issued accounting standard allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from tax rate changes due to the Tax Cuts and Jobs Act. The amendments in this update are required for annual and interim periods beginning after December 15, 2018. This standard also requires the Company to disclose its accounting policy for releasing income tax effects from accumulated other comprehensive income. In general, the Company applies the individual item approach. As permitted by the accounting standard, the Company early adopted this accounting standard during the three months ended March 31, 2018. As a result of the adoption, the Company elected to reclassify the income tax effects from AOCI to Retained earnings and reclassified $7.6 million . Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This accounting standard seeks to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Current US GAAP does not require lessees to recognize assets and liabilities arising from operating leases on the balance sheet. This standard also provides guidance from the lessees’ perspective on how to determine if a lease is an operating lease or a financing lease and the differences in accounting for each. In January 2018, the FASB issued ASU No. 2018-01, which allows for an entity to elect an optional transition practical expedient for land easements that exist or expired before adoption of Topic 842. The adoption of this standard is required for interim and fiscal periods ending after December 15, 2018 and it is required to be applied using the modified retrospective approach. Early adoption is permitted. The Company is currently assessing the impact that this standard will have on its financial position, results of operations, cash flows and disclosures. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” This newly issued accounting standard improves the financial reporting and disclosure of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this update make improvements to simplify the application of the hedge accounting guidance in current US GAAP based on the feedback received from preparers, auditors, users and other stakeholders. More specifically, this update expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this update are required for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this update. The amended presentation and disclosure guidance is required only prospectively. The Company is currently assessing the impact that this standard will have on its financial position, results of operations, cash flows and disclosures. |
STOCK COMPENSATION
STOCK COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK COMPENSATION | STOCK COMPENSATION The following table represents total stock based compensation expense for non-qualified stock options, restricted stock units (“RSU”) and the tax related benefit for the three months ended March 31, 2018 and 2017 . Three Months Ended (in millions) 2018 2017 Stock option expense $ 0.7 $ 2.7 RSU expense 8.3 7.7 Total stock based compensation expense $ 9.0 $ 10.4 Related deferred income tax benefit $ 1.8 $ 3.3 For the three months ended March 31, 2018 and 2017 , stock compensation expense of $9.0 million and $10.4 million , respectively, was recorded on the Consolidated Statements of Operations. For the three months ended March 31, 2018 and 2017 , $7.0 million and $10.1 million , respectively, was recorded in Selling, general, and administrative expense, and $0.3 million and $0.3 million was recorded in Cost of products sold on the Consolidated Statements of Operations. For the three months ended March 31, 2018, the Company recorded $1.7 million in Restructuring and other costs on the Consolidated Statements of Operations. |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME | 3 Months Ended |
Mar. 31, 2018 | |
COMPREHENSIVE INCOME [Abstract] | |
COMPREHENSIVE INCOME | COMPREHENSIVE INCOME The following table summarizes the components of comprehensive income, net of tax, for the three months ended March 31, 2018 and 2017 : Three Months Ended (in millions) 2018 2017 Foreign currency translation gains $ 84.0 $ 59.3 Foreign currency translation loss on hedges of net investments (18.9 ) (9.5 ) These amounts are recorded in AOCI, net of any related tax adjustments. At March 31, 2018 and December 31, 2017 , the cumulative tax adjustments were $ 195.2 million and $ 203.8 million , respectively, primarily related to foreign currency translation gains and losses. The cumulative foreign currency translation adjustments included translation gains of $106.1 million and $22.1 million at March 31, 2018 and December 31, 2017 , respectively, and cumulative losses on loans designated as hedges of net investments of $145.5 million and $126.6 million , respectively. These foreign currency translation gains and losses were partially offset by movements on derivative financial instruments, which are discussed in Note 10 , Financial Instruments and Derivatives. Changes in AOCI, net of tax, by component for the three months ended March 31, 2018 and 2017 were as follows: (in millions) Foreign Currency Translation Gain (Loss) Gain and (Loss) on Derivative Financial Instruments Designated as Cash Flow Hedges Gain and (Loss) on Derivative Financial Instruments Net Unrealized Holding Gain (Loss) on Available-for-Sale Securities Pension Liability Gain (Loss) Total Balance, net of tax, at December 31, 2017 $ (104.5 ) $ (12.6 ) $ (127.6 ) $ 44.3 $ (90.6 ) $ (291.0 ) Other comprehensive income (loss) before reclassifications and tax impact 84.3 (7.0 ) (17.9 ) — — 59.4 Tax (expense) benefit (19.2 ) 1.3 9.3 — (8.6 ) Other comprehensive income (loss), net of tax, before reclassifications 65.1 (5.7 ) (8.6 ) — — 50.8 Amounts reclassified from accumulated other comprehensive income (loss), net of tax — 2.3 — (44.3 ) 1.2 (40.8 ) Net increase (decrease) in other comprehensive income 65.1 (3.4 ) (8.6 ) (44.3 ) 1.2 10.0 Balance, net of tax, at March 31, 2018 $ (39.4 ) $ (16.0 ) $ (136.2 ) $ — $ (89.4 ) $ (281.0 ) (in millions) Foreign Currency Translation Gain (Loss) Gain and (Loss) on Derivative Financial Instruments Designated as Cash Flow Hedges Gain and (Loss) on Derivative Financial Instruments Pension Liability Gain (Loss) Total Balance, net of tax, at December 31, 2016 $ (490.5 ) $ (3.2 ) $ (116.8 ) $ (95.2 ) $ (705.7 ) Other comprehensive (loss) income before reclassifications and tax impact 40.2 (1.7 ) (1.9 ) — 36.6 Tax (expense) benefit 9.6 0.6 (0.3 ) — 9.9 Other comprehensive (loss) income, net of tax, before reclassifications 49.8 (1.1 ) (2.2 ) — 46.5 Amounts reclassified from accumulated other comprehensive (loss) income, net of tax — — — 1.2 1.2 Net (decrease) increase in other comprehensive income 49.8 (1.1 ) (2.2 ) 1.2 47.7 Balance, net of tax, at March 31, 2017 $ (440.7 ) $ (4.3 ) $ (119.0 ) $ (94.0 ) $ (658.0 ) Reclassifications out of AOCI to the Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 were as follows: (in millions) Details about AOCI Components Amounts Reclassified from AOCI Affected Line Item on the Consolidated Statements of Operations Three Months Ended 2018 2017 Loss on derivative financial instruments: Interest rate swaps $ (0.6 ) $ (0.8 ) Interest expense Foreign exchange forward contracts (1.8 ) 0.5 Cost of products sold Net loss before tax (2.4 ) (0.3 ) Tax impact 0.1 — Provision for income taxes Net loss after tax $ (2.3 ) $ (0.3 ) Amortization of defined benefit pension and other postemployment benefit items: Amortization of net actuarial losses $ (1.7 ) $ (1.7 ) (a) Net loss before tax (1.7 ) (1.7 ) Tax impact 0.5 0.5 Provision for income taxes Net loss after tax $ (1.2 ) $ (1.2 ) Total reclassifications for the period $ (3.5 ) $ (1.5 ) (a) These AOCI components are included in the computation of net periodic benefit cost for the three months ended March 31, 2018 and 2017 (see Note 8 , Benefit Plans, for additional details). |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2018 and 2017 : Diluted Earnings Per Common Share Computation Three Months Ended (in millions, except per share amounts) 2018 2017 Net income attributable to Dentsply Sirona $ 81.2 $ 59.8 Weighted average common shares outstanding 227.2 230.1 Incremental weighted average shares from assumed exercise of dilutive options from stock-based compensation awards 2.7 3.9 Total weighted average diluted shares outstanding 229.9 234.0 Earnings per common share - diluted $ 0.35 $ 0.26 The calculation of weighted average diluted common shares outstanding excludes stock options and RSUs of 1.6 million and 0.8 million shares of common stock that were outstanding during the three months ended March 31, 2018 and 2017 , respectively, because their effect would be antidilutive. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS During the quarter ended June 30, 2017, the Company acquired Recherche Techniques Dentaires (“RTD”), a privately-held France-based manufacturer of endodontic posts for $ 132.0 million . The Company recorded $ 83.9 million in goodwill related to the fair value of assets acquired and liabilities assumed and the consideration given for the acquisition. Goodwill is considered to represent the value associated with workforce and synergies the two companies anticipate realizing as a combined company. The goodwill is not expected to be deductible for tax purposes. Intangible assets acquired consist of the following: (in millions, except for useful life) Weighted Average Useful Life Amount (in years) Customer relationships $ 18.1 15 Developed technology and patents 22.4 15 Trade names and trademarks 8.5 Indefinite Total $ 49.0 The results of operations for this business have been included in the accompanying financial statements as of the effective date of the transaction. This transaction was not material to the Company’s net sales and net income attributable to Dentsply Sirona for the three months ended March 31, 2018 . On May 1, 2018 , the Company acquired all of the outstanding shares of privately held OraMetrix, Inc. for $90.0 million , with additional payments totaling $60.0 million , subject to meeting earn-out provisions. OraMetrix specializes in orthodontic treatment planning software, wire bending, and clear aligner manufacturing and is headquartered in Richardson, Texas. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has numerous operating businesses covering a wide range of dental consumable products and dental technology products primarily serving the professional dental market, and certain healthcare products. Professional dental products represented approximately 92% of net sales for the three months ended March 31, 2018 and March 31, 2017 . The operating businesses are combined into two operating groups, which generally have overlapping geographical presence, customer bases, distribution channels, and regulatory oversight. These operating groups are considered the Company’s reportable segments as the Company’s chief operating decision-maker regularly reviews financial results at the operating group level and uses this information to manage the Company’s operations. The Company evaluates performance of the segments based on the groups’ net third party sales, excluding precious metal content, and segment adjusted operating income. The Company defines net third party sales excluding precious metal content as the Company’s net sales excluding the precious metal cost within the products sold, which is considered a measure not calculated in accordance with US GAAP, and is therefore considered a non-US GAAP measure. Management believes that the presentation of net sales, excluding precious metal content, provides useful information to investors because a portion of Dentsply Sirona’s net sales is comprised of sales of precious metals generated through sales of the Company’s precious metal dental alloy products, which are used by third parties to construct crown and bridge materials. Due to the fluctuations of precious metal prices and because the cost of the precious metal content of the Company’s sales is largely passed through to customers and has minimal effect on earnings, Dentsply Sirona reports net sales both with and without precious metal content to show the Company’s performance independent of precious metal price volatility and to enhance comparability of performance between periods. The Company uses its cost of precious metal purchased as a proxy for the precious metal content of sales, as the precious metal content of sales is not separately tracked and invoiced to customers. The Company believes that it is reasonable to use the cost of precious metal content purchased in this manner since precious metal dental alloy sale prices are typically adjusted when the prices of underlying precious metals change. The Company’s exclusion of precious metal content in the measurement of net third party sales enhances comparability of performance between periods as it excludes the fluctuating market prices of the precious metal content. The Company also evaluates segment performance based on each segment’s adjusted operating income before provision for income taxes and interest. Segment adjusted operating income is defined as operating income before income taxes and before certain corporate headquarter unallocated costs, restructuring and other costs, interest expense, interest income, other expense (income), net, amortization of intangible assets and depreciation resulting from the fair value step-up of property, plant and equipment from acquisitions. The Company’s segment adjusted operating income is considered a non-US GAAP measure. A description of the products and services provided within each of the Company’s two operating segments is provided below. Technologies & Equipment This segment is responsible for the worldwide design, manufacture, sales and distribution of the Company’s Dental Technology and Equipment Products and Healthcare Consumable Products. These products include dental implants, laboratory dental products, CAD/CAM systems, imaging systems, treatment centers, as well as consumable medical device products. Consumables This segment is responsible for the worldwide design, manufacture, sales and distribution of the Company’s Dental Consumable Products which include preventive, restorative, instruments, endodontic, and orthodontic dental products. The following tables set forth information about the Company’s segments for the three months ended March 31, 2018 and 2017 . Certain reclassifications have been made to prior years’ data in order to conform to current year presentation: Third Party Net Sales Three Months Ended (in millions) 2018 2017 Technologies & Equipment $ 508.3 $ 479.0 Consumables 447.8 421.5 Total net sales $ 956.1 $ 900.5 Third Party Net Sales, Excluding Precious Metal Content Three Months Ended (in millions) 2018 2017 Technologies & Equipment $ 498.0 $ 467.9 Consumables 447.8 421.5 Total net sales, excluding precious metal content 945.8 889.4 Precious metal content of sales 10.3 11.1 Total net sales, including precious metal content $ 956.1 $ 900.5 Segment Adjusted Operating Income Three Months Ended (in millions) 2018 2017 Technologies & Equipment $ 74.8 $ 54.0 Consumables 107.1 116.0 Segment adjusted operating income before income taxes and interest 181.9 170.0 Reconciling items expense (income): All Other (a) 51.3 36.0 Restructuring and other costs 10.2 3.1 Interest expense 8.6 9.3 Interest income (0.6 ) (0.7 ) Other expense (income), net (34.1 ) (1.0 ) Amortization of intangible assets 49.9 45.2 Depreciation resulting from the fair value step-up of property, plant and equipment from business combinations 1.8 1.5 Income before income taxes $ 94.8 $ 76.6 (a) Includes the results of unassigned Corporate headquarter costs, inter-segment eliminations and one distribution warehouse not managed by named segments. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost and net realizable value. The cost of inventories determined by the last-in, first-out (“LIFO”) method at March 31, 2018 and December 31, 2017 were $ 12.5 million and $ 12.4 million , respectively. The cost of remaining inventories was determined by the first-in, first-out (“FIFO”) or average cost methods. If the FIFO method had been used to determine the cost of LIFO inventories, the amounts at which net inventories are stated would be higher than reported at March 31, 2018 and December 31, 2017 by $ 8.3 million and $ 10.6 million , respectively. Inventories, net of inventory valuation reserves, consist of the following: (in millions) March 31, 2018 December 31, 2017 Finished goods $ 452.3 $ 387.6 Work-in-process 94.6 90.4 Raw materials and supplies 149.7 145.1 Inventories, net $ 696.6 $ 623.1 The inventory valuation allowance was $ 79.9 million and $ 71.7 million at March 31, 2018 and December 31, 2017 , respectively. |
BENEFIT PLANS
BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
BENEFIT PLANS | BENEFIT PLANS The following sets forth the components of net periodic benefit cost of the Company’s defined benefit plans for the three months ended March 31, 2018 and 2017 : Defined Benefit Plans Three Months Ended Location on (in millions) 2018 2017 (a) Consolidated Statements of Operations Service cost $ 1.8 $ 1.7 Cost of products sold Service cost 2.4 2.1 Selling, general and administrative expenses Interest cost 1.7 1.7 Other expense (income), net Expected return on plan assets (1.4 ) (1.1 ) Other expense (income), net Amortization of net actuarial loss 1.7 1.6 Other expense (income), net Net periodic benefit cost $ 6.2 $ 6.0 (a) Prior period presented reflects adoption of ASU 2017-07. For further discussion on the reclassification, refer to Note 1, Significant Accounting Policies. The following sets forth the information related to the contributions to the Company’s defined benefit plans for 2018 : (in millions) Pension Benefits Actual contributions through March 31, 2018 $ 3.5 Expected contributions for the remainder of the year 12.8 Total actual and expected contributions $ 16.3 |
RESTRUCTURING AND OTHER COSTS
RESTRUCTURING AND OTHER COSTS | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND OTHER COSTS | RESTRUCTURING AND OTHER COSTS Restructuring Costs During the three months ended March 31, 2018 and 2017 , the Company recorded Restructuring costs and other costs of $10.2 million and $3.1 million respectively, which includes net restructuring costs of $7.4 million and $2.3 million , respectively. These costs are recorded in Restructuring and other costs on the Consolidated Statements of Operations and the associated liabilities are recorded in Accrued liabilities on the Consolidated Balance Sheets. At March 31, 2018 , the Company’s restructuring accruals were as follows: Severance (in millions) 2016 and 2017 Plans 2018 Plans Total Balance at December 31, 2017 $ 7.7 $ 48.2 $ — $ 55.9 Provisions 0.2 (1.6 ) 8.4 7.0 Amounts applied (1.5 ) (4.2 ) (5.1 ) (10.8 ) Change in estimates — (0.2 ) — (0.2 ) Balance at March 31, 2018 $ 6.4 $ 42.2 $ 3.3 $ 51.9 Lease/Contract Terminations (in millions) 2016 and 2017 Plans 2018 Plans Total Balance at December 31, 2017 $ 0.3 $ 0.2 $ — $ 0.5 Provisions 0.1 — 0.1 0.2 Amounts applied (0.4 ) — (0.1 ) (0.5 ) Balance at March 31, 2018 $ — $ 0.2 $ — $ 0.2 Other Restructuring Costs (in millions) 2016 and 2017 Plans 2018 Plans Total Balance at December 31, 2017 $ 2.0 $ 1.7 $ — $ 3.7 Provisions — 0.3 0.1 0.4 Amounts applied (0.1 ) (0.1 ) (0.1 ) (0.3 ) Balance at March 31, 2018 $ 1.9 $ 1.9 $ — $ 3.8 The following table provides the year-to-date changes in the restructuring accruals by segment: (in millions) December 31, 2017 Provisions Amounts Applied Change in Estimates March 31, 2018 Technologies & Equipment $ 13.3 $ 2.4 $ (5.4 ) $ — $ 10.3 Consumables 46.8 0.2 (4.0 ) (0.2 ) 42.8 All Other — 5.0 (2.2 ) — 2.8 Total $ 60.1 $ 7.6 $ (11.6 ) $ (0.2 ) $ 55.9 Other Costs Other costs for the three months ended March 31, 2018 were $2.8 million . |
FINANCIAL INSTRUMENTS AND DERIV
FINANCIAL INSTRUMENTS AND DERIVATIVES | 3 Months Ended |
Mar. 31, 2018 | |
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 variable rate debt to fixed rate debt. Derivative Instruments Designated as Hedging Cash Flow Hedges The following table summarizes the notional amounts of cash flow hedges by derivative instrument type at March 31, 2018 and the notional amounts expected to mature during the next 12 months, with a discussion of the various cash flow hedges by derivative instrument type following the table: Aggregate Notional Amount Aggregate Notional Amount Maturing within 12 Months (in millions) Foreign exchange forward contracts $ 349.1 $ 279.5 Interest rate swaps 118.2 — Total derivative instruments designated as cash flow hedges $ 467.3 $ 279.5 Foreign Exchange Risk Management The Company uses a layered hedging program to hedge select anticipated foreign currency cash flows to reduce volatility in both cash flows and reported earnings of the consolidated Company. The Company accounts for the designated foreign exchange forward contracts as cash flow hedges. As a result, the Company records the fair value of the contracts primarily through AOCI based on the 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 on the Consolidated Statements of Operations in the same period that the hedged transaction is recorded. The time value component of the fair value of the derivative is deemed ineffective and is reported currently in Other expense (income), net on the Consolidated Statements of Operations in the period which it is applicable. Any cash flows associated with these instruments are included in cash from operating activities on the Consolidated Statements of Cash Flows. The Company hedges various currencies, with the most significant activity occurring in euros, Swedish kronor, Canadian dollars, British pounds, Swiss francs, Japanese yen and Australian dollars. These foreign exchange forward contracts generally have maturities up to 18 months and the counterparties to the transactions are typically large international financial institutions. Interest Rate Risk Management The Company uses interest rate swaps to convert a portion of its variable interest rate debt to fixed interest rate debt. At March 31, 2018 , the Company has one significant exposure hedged with interest rate contracts. The exposure is hedged with derivative contracts having notional amounts totaling 12.6 billion Japanese yen, which effectively converts the underlying variable interest rate debt facility to a fixed interest rate of 0.9% for an initial term of five years ending September 2019. The Company enters into interest rate swap contracts infrequently as they are only used to manage interest rate risk on long-term debt instruments and not for speculative purposes. Any cash flows associated with these instruments are included in cash from operating activities on the Consolidated Statements of Cash Flows. Cash Flow Hedge Activity The following tables summarize the amount of gains (losses) recorded in AOCI on the Consolidated Balance Sheets and income (expense) on the Company’s Consolidated Statements of Operations related to all cash flow hedges for the three months ended March 31, 2018 and 2017 : March 31, 2018 Gain (Loss) in AOCI Consolidated Statements of Operations Location Effective Portion Reclassified from AOCI into Income (Expense) Ineffective Portion Recognized in Income (Expense) (in millions) Effective Portion: Interest rate swaps $ — Interest expense $ (0.6 ) $ — Foreign exchange forward contracts (7.0 ) Cost of products sold (1.8 ) — Ineffective Portion: Foreign exchange forward contracts — Other expense (income), net — (0.1 ) Total in cash flow hedging $ (7.0 ) $ (2.4 ) $ (0.1 ) March 31, 2017 Gain (Loss) in AOCI Consolidated Statements of Operations Location Effective Portion Reclassified from AOCI into Income (Expense) Ineffective Portion Recognized in Income (Expense) (in millions) Effective Portion: Interest rate swaps $ (0.2 ) Interest expense $ (0.8 ) $ — Foreign exchange forward contracts (1.5 ) Cost of products sold 0.5 — Ineffective Portion: Foreign exchange forward contracts — Other expense (income), net — (0.3 ) Total for cash flow hedging $ (1.7 ) $ (0.3 ) $ (0.3 ) Overall, the derivatives designated as cash flow hedges are considered to be highly effective. At March 31, 2018 , the Company expects to reclassify $11.3 million of deferred net losses on cash flow hedges recorded in AOCI on the Consolidated Statements of Operations during the next 12 months. The term over which the Company is hedging exposures to variability of cash flows (for all forecasted transactions, excluding interest payments on variable interest rate debt) is typically 18 months. For the rollforward of derivative instruments designated as cash flow hedges in AOCI see Note 3 , Comprehensive Income. Hedges of Net Investments in Foreign Operations The Company has significant investments in foreign subsidiaries the most significant of which are denominated in euros, Swiss francs, Japanese yen and Swedish kronor. The net assets of these subsidiaries are exposed to volatility in currency exchange rates. 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 designated as hedges of net investments, which are included in AOCI. Any cash flows associated with these instruments are included in investing activities on the Consolidated Statements of Cash Flows except for derivative instruments that include an other-than-insignificant financing element, in which case all cash flows will be classified as financing activities on the Consolidated Statements of Cash Flows. On January 2, 2018, the Company entered into a 245.6 million euro cross currency basis swap maturing in August 2021, that was designated as a hedge of net investments. This contract effectively converts the $295.7 million bond coupon from 4.1% to 1.7% , which will result in a net reduction of interest expense through maturity in 2021. The following table summarizes the notional amount of hedges of net investments by derivative instrument at March 31, 2018 and the notional amounts expected to mature during the next 12 months: Aggregate Aggregate Notional Amount Maturing within 12 Months (in millions) Foreign exchange forward contracts $ 632.0 $ 315.1 Cross currency basis swaps 302.6 — Total for instruments not designated as hedges $ 934.6 $ 315.1 The fair value of the foreign exchange forward contracts is the estimated amount the Company would receive or pay at the reporting date, taking into account the effective interest rates and foreign exchange rates. The effective portion of the change in the value of these derivatives is recorded in AOCI, net of tax effects. The following tables summarize the amount of gains (losses) recorded in AOCI on the Consolidated Balance Sheets and Other expense (income), net on the Company’s Consolidated Statements of Operations related to the hedges of net investments for the three months ended March 31, 2018 and 2017 : March 31, 2018 Gain (Loss) in AOCI Consolidated Statements of Operations Location Recognized in Income (Expense) (in millions) Effective Portion: Cross currency basis swaps $ (6.4 ) Interest expense $ 1.7 Other expense (income), net (6.6 ) Foreign exchange forward contracts (11.5 ) Other expense (income), net 1.5 Total for net investment hedging $ (17.9 ) $ (3.4 ) March 31, 2017 Gain (Loss) in AOCI Consolidated Statements of Operations Location Recognized in Income (Expense) (in millions) Effective Portion: Foreign exchange forward contracts $ (1.9 ) Other expense (income), net $ 0.5 Total for net investment hedging $ (1.9 ) $ 0.5 Derivative Instruments Not Designated as Hedges The Company enters into derivative instruments with the intent to partially mitigate the foreign exchange revaluation risk associated with recorded assets and liabilities that are denominated in a non-functional currency. The gains and losses on these derivative transactions offset the gains and losses generated by the revaluation of the underlying non-functional currency balances and are recorded in Other expense (income), net on the Consolidated Statements of Operations. The Company primarily uses foreign exchange forward contracts and cross currency basis swaps to hedge these risks. Any cash flows associated with the foreign exchange forward contracts and interest rate swaps not designated as hedges are included in cash from operating activities on the Consolidated Statements of Cash Flows. Any cash flows associated with the cross currency basis swaps not designated as hedges are included in investing activities on the Consolidated Statements of Cash Flows except for derivative instruments that include an other-than-insignificant financing element, in which case the cash flows will be classified as financing activities on the Consolidated Statements of Cash Flows. The following tables summarize the aggregate notional amounts of the Company’s economic hedges not designated as hedges by derivative instrument types at March 31, 2018 and the notional amounts expected to mature during the next 12 months: Aggregate Notional Amount Aggregate Notional Amount Maturing within 12 Months (in millions) Foreign exchange forward contracts $ 364.4 $ 364.4 Total for instruments not designated as hedges $ 364.4 $ 364.4 The following table summarizes the amounts of gains (losses) recorded on the Company’s Consolidated Statements of Operations related to the economic hedges not designated as hedging for the three months ended March 31, 2018 and 2017 : Consolidated Statements of Operations Location Gain (Loss) Recognized Three Months Ended (in millions) 2018 2017 Foreign exchange forward contracts (a) Other expense (income), net $ 0.7 $ (2.8 ) Total for instruments not designated as hedges $ 0.7 $ (2.8 ) (a) The gains and losses on these derivative transactions offset the gains and losses generated by the revaluation of the underlying non-functional currency balances which are recorded in Other expense (income), net on the Consolidated Statements of Operations. Consolidated Balance Sheets Location of Derivative Fair Values The following tables summarize the fair value and the location of the Company’s derivatives on the Consolidated Balance Sheets at March 31, 2018 and December 31, 2017 : March 31, 2018 (in millions) Prepaid Expenses and Other Current Assets, Net Other Noncurrent Assets, Net Accrued Liabilities Other Noncurrent Liabilities Designated as Hedges Foreign exchange forward contracts $ 0.9 $ 0.2 $ 19.6 $ 7.8 Interest rate swaps — — 0.3 0.1 Cross currency basis swaps — — — 12.9 Total $ 0.9 $ 0.2 $ 19.9 $ 20.8 Not Designated as Hedges Foreign exchange forward contracts $ 1.6 $ — $ 5.2 $ — Total $ 1.6 $ — $ 5.2 $ — December 31, 2017 (in millions) Prepaid Other Noncurrent Assets, Net Accrued Liabilities Other Noncurrent Liabilities Designated as Hedges Foreign exchange forward contracts $ 1.4 $ — $ 13.4 $ 4.5 Interest rate swaps — — 0.3 0.1 Total $ 1.4 $ — $ 13.7 $ 4.6 Not Designated as Hedges Foreign exchange forward contracts $ 3.4 $ — $ 3.7 $ — Total $ 3.4 $ — $ 3.7 $ — 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 on the Consolidated Balance Sheets. Offsetting of financial assets and liabilities under netting arrangements at March 31, 2018 : Gross Amounts Not Offset on the Consolidated Balance Sheets (in millions) Gross Amounts Recognized Gross Amount Offset on the Consolidated Balance Sheets Net Amounts Presented on the Consolidated Balance Sheets Financial Instruments Cash Collateral Received/Pledged Net Amount Assets Foreign exchange forward contracts $ 2.7 $ — $ 2.7 $ (2.6 ) $ — $ 0.1 Total Assets $ 2.7 $ — $ 2.7 $ (2.6 ) $ — $ 0.1 Gross Amounts Not Offset on the Consolidated Balance Sheets (in millions) Gross Amounts Recognized Gross Amount Offset on the Consolidated Balance Sheets Net Amounts Presented on the Consolidated Balance Sheets Financial Instruments Cash Collateral Received/Pledged Net Amount Liabilities Foreign exchange forward contracts $ 32.6 $ — $ 32.6 $ (1.5 ) $ — $ 31.1 Interest rate swaps 0.4 — 0.4 (0.1 ) — 0.3 Cross currency basis swaps 12.9 — 12.9 (1.0 ) — 11.9 Total Liabilities $ 45.9 $ — $ 45.9 $ (2.6 ) $ — $ 43.3 Offsetting of financial assets and liabilities under netting arrangements at December 31, 2017 : Gross Amounts Not Offset on the Consolidated Balance Sheets (in millions) Gross Amounts Recognized Gross Amount Offset on the Consolidated Balance Sheets Net Amounts Presented on the Consolidated Balance Sheets Financial Instruments Cash Collateral Received/Pledged Net Amount Assets Foreign exchange forward contracts $ 4.8 $ — $ 4.8 $ (3.9 ) $ — $ 0.9 Total Assets $ 4.8 $ — $ 4.8 $ (3.9 ) $ — $ 0.9 Gross Amounts Not Offset on the Consolidated Balance Sheets (in millions) Gross Amounts Recognized Gross Amount Offset on the Consolidated Balance Sheets Net Amounts Presented on the Consolidated Balance Sheets Financial Instruments Cash Collateral Received/Pledged Net Amount Liabilities Foreign exchange forward contracts $ 21.6 $ — $ 21.6 $ (3.8 ) $ — $ 17.8 Interest rate swaps 0.4 — 0.4 (0.1 ) — 0.3 Total Liabilities $ 22.0 $ — $ 22.0 $ (3.9 ) $ — $ 18.1 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT The Company records financial instruments at fair value with unrealized gains and losses related to certain financial instruments reflected in AOCI on the Consolidated Balance Sheets. In addition, the Company recognizes certain liabilities at fair value. The Company applies the market approach for recurring fair value measurements. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities that are recorded at fair value as of the balance sheet date are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair value of financial instruments is determined by reference to various market data and other valuation techniques as appropriate. The Company believes the carrying amounts of cash and cash equivalents, accounts receivable (net of allowance for doubtful accounts), prepaid expenses and other current assets, accounts payable, accrued liabilities, income taxes payable and notes payable approximate fair value due to the short-term nature of these instruments. The Company estimated the fair value using Level 1 inputs and carrying value of total long-term debt, including the current portion, was $ 1,661.0 million and $ 1,654.6 million , respectively at March 31, 2018 . At December 31, 2017 , the Company estimated the fair value and carrying value, including the current portion, was $ 1,629.9 million and $ 1,620.8 million , respectively. The variable interest rate on the Japanese yen term loan is consistent with current market conditions, therefore the fair value approximates the loan’s carrying value. The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2018 and December 31, 2017 : March 31, 2018 (in millions) Total Level 1 Level 2 Level 3 Assets Foreign exchange forward contracts $ 2.7 $ — $ 2.7 $ — Total assets $ 2.7 $ — $ 2.7 $ — Liabilities Interest rate swaps $ 0.4 $ — $ 0.4 $ — Cross currency basis swaps 12.9 — 12.9 — Foreign exchange forward contracts 32.6 — 32.6 — Contingent considerations on acquisitions 9.1 — — 9.1 Total liabilities $ 55.0 $ — $ 45.9 $ 9.1 December 31, 2017 (in millions) Total Level 1 Level 2 Level 3 Assets Foreign exchange forward contracts $ 4.8 $ — $ 4.8 $ — Available-for-sale security 54.4 — 54.4 — Total assets $ 59.2 $ — $ 59.2 $ — Liabilities Interest rate swaps $ 0.4 $ — $ 0.4 $ — Foreign exchange forward contracts 21.6 — 21.6 — Contingent considerations on acquisitions 8.6 — — 8.6 Total liabilities $ 30.6 $ — $ 22.0 $ 8.6 There have been no transfers between levels during the three months ended March 31, 2018 and 2017 . Derivative valuations are based on observable inputs to the valuation model including interest rates, foreign currency exchange rates and credit risks. The Company utilizes interest rate swaps and foreign exchange forward contracts that are considered cash flow hedges. In addition, the Company at times employs forward exchange contracts that are considered hedges of net investment in foreign operations. Designated derivative instruments are further discussed in Note 10 , Financial Instruments and Derivatives. The Company’s Level 3 liabilities at March 31, 2018 and December 31, 2017 are related to earn-out obligations on prior acquisitions. The following table presents a reconciliation of the Company’s Level 3 holdings measured at fair value on a recurring basis using unobservable inputs: Earn-out (in millions) Obligations Balance at December 31, 2017 $ 8.6 Fair value adjustment: Reported in Other expense (income), net 0.2 Effect of exchange rate changes 0.3 Balance at March 31, 2018 $ 9.1 For the three months ended March 31, 2018 , there were no other purchases, issuances or transfers of Level 3 financial instruments. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Uncertainties in Income Taxes The Company recognizes in the interim consolidated financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. 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 interim consolidated financial statements. Final settlement and resolution of outstanding tax matters in various jurisdictions during the next twelve months are not expected to be significant. Other Tax Matters During the quarter ended March 31, 2018 , the Company recorded the following discrete tax items, $ 2.2 million of excess tax benefit related to employee share-based compensation, tax expense of $1.2 million related to valuation allowances, $ 0.2 million of tax expense related to enacted statutory rate changes, $ 7.2 million of tax expense for other discrete tax matters and $3.4 million tax benefit related to U.S. tax reform. The Company also recorded $1.1 million of tax expense as a discrete item related to the gain on sale of marketable securities. During the first quarter of 2017, the Company recorded $6.3 million of excess tax benefit related to employee share-based compensation, $12.2 million of tax expense related to enacted statutory rate changes and $1.4 million of tax benefit for other discrete tax matters. U.S. Federal Legislative Changes On December 22, 2017, the Tax Cuts and Jobs Act (the "Act" or "U.S. tax reform") was enacted. U.S. tax reform, among other things, reduced the U.S. federal income tax rate to 21% in 2018 from 35%, instituted a dividends received deduction for foreign earnings with a related tax for the deemed repatriation of unremitted foreign earnings and created a new U.S. minimum tax on earnings of foreign subsidiaries. In addition, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for enactment effects of SAB 118 and provides a measurement period of up to one year from the Act’s enactment date for companies to complete their accounting under Accounting Standards Codification No. 740 “Income Taxes”, (“ASC 740”). In accordance with SAB 118, to the extent that a company’s accounting for certain income tax effects of the Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Act. The Company has accounted for the tax effects of the Act on a provisional basis. At December 31, 2017, the accounting for certain income tax effects was incomplete, but the Company determined reasonable estimates for those effects which were included in the financial statements. During the three months ended March 31, 2018, a tax benefit of $3.4 million related to provisional estimates was recorded. The Company expects to complete the accounting during 2018 to comply with the one year measurement period. Based on information available, at December 31, 2017, the Company estimated the cumulative undistributed foreign earnings and recorded a provisional estimate of income tax expense related to the one-time deemed repatriation toll charge. There is still uncertainty as to the application of the Act, in particular as it relates to state income taxes. Further, the Company has not yet completed the analysis of the components of the computation, including the amount of the foreign earnings subject to U.S. income tax, and the portion of the foreign earnings held in cash or other specified assets. At March 31, 2018, primarily due to the utilization of foreign tax credit carryforwards and certain other tax attributes the estimated cash liability for the deemed repatriation of foreign earnings is approximately $1.0 million . However, as the Company completes its analysis an additional liability could be recorded and the Company would elect to make installment payments as allowed under the Act. As a result of the Act, the Company can repatriate the cumulative undistributed foreign earnings back to the U.S. when needed with minimal U.S. income tax consequences other than the one-time deemed repatriation toll charge. The Company is still evaluating whether to change its indefinite reinvestment assertion in light of the Act and consider that conclusion to be incomplete under SAB 118. For the three months ended March 31, 2018, for the Global Intangible Low Tax Income (“GILTI”) provision of the Act, an estimate was recorded based on current guidance as a period expense, but the Company has not yet completed its assessment or elected an accounting policy to either recognize deferred taxes for basis differences expected to reverse as GILTI or to record GILTI as period costs if and when incurred. In accordance with SEC guidance, provisional amounts may be refined as a result of additional guidance from, and interpretations by, U.S. regulatory and standard-setting bodies, and changes in assumptions. In subsequent periods, provisional amounts will be adjusted for the effects, if any, of interpretative guidance issued by the U.S. Department of the Treasury. The effects of the Act may be subject to changes for items that were previously reported as provisional amounts, as well as any element of the Act that a provisional estimate could not be made, and such changes could be material. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS A reconciliation of changes in the Company’s goodwill by reportable segment is as follows: (in millions) Technologies & Equipment Consumables Total Balance at December 31, 2017 $ 3,660.6 $ 878.6 $ 4,539.2 Acquisition related additions — 3.7 3.7 Measurement period adjustments on prior acquisitions — 0.5 0.5 Effects of exchange rate changes 23.5 6.3 29.8 Balance at March 31, 2018 $ 3,684.1 $ 889.1 $ 4,573.2 The following table provides the gross carrying amount of goodwill and the cumulative goodwill impairment: March 31, 2018 December 31, 2017 (in millions) Gross Carrying Amount Cumulative Impairment Net Carrying Amount Gross Carrying Amount Cumulative Impairment Net Carrying Amount Technologies & Equipment $ 5,335.0 $ (1,650.9 ) $ 3,684.1 $ 5,311.5 $ (1,650.9 ) $ 3,660.6 Identifiable definite-lived and indefinite-lived intangible assets consist of the following: March 31, 2018 December 31, 2017 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents and developed technology $ 1,420.3 $ (338.9 ) $ 1,081.4 $ 1,385.5 $ (305.0 ) $ 1,080.5 Trademarks 76.4 (47.9 ) 28.5 76.4 (46.5 ) 29.9 Licensing agreements 34.5 (25.2 ) 9.3 31.2 (24.8 ) 6.4 Customer relationships 1,127.1 (295.6 ) 831.5 1,109.1 (272.0 ) 837.1 Total definite-lived $ 2,658.3 $ (707.6 ) $ 1,950.7 $ 2,602.2 $ (648.3 ) $ 1,953.9 Indefinite-lived tradenames and trademarks $ 860.7 $ — $ 860.7 $ 846.8 $ — $ 846.8 Total identifiable intangible assets $ 3,519.0 $ (707.6 ) $ 2,811.4 $ 3,449.0 $ (648.3 ) $ 2,800.7 At December 31, 2017 the Company identified impairment triggering events related to CAD/CAM, Imaging and Treatment Center equipment reporting units, all within the Technologies & Equipment segment. As a result, the Company tested these reporting units for impairment and recorded an impairment charge. The Company, as a result of the triggering event, tested the indefinite-lived intangible assets related to these reporting units. The Company identified that certain tradenames and trademarks related to these reporting units, all within the Technologies & Equipment segment, were impaired and recorded an impairment charge. Fair value of these reporting units approximates book value of these reporting units. At March 31, 2018 , the Company noted no impairment triggering events related to these reporting units. Unfavorable developments in the market for the dental equipment industry, an increase in discount rates, unfavorable changes in earnings multiples or a decline in future cash flow projections, among other factors, may cause a change in circumstances indicating that the carrying value of the indefinite-lived assets and goodwill within the Company’s reporting units may not be recoverable. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation The SEC’s Division of Enforcement has asked the Company to provide documents and information concerning the Company’s accounting and disclosures. The Company is cooperating with the SEC’s investigation. The Company is unable to predict the ultimate outcome of this matter, or whether it will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. On May 5, 2015, Roth Licensing, LLC (“Roth Licensing”) filed a demand for arbitration alleging that GAC International, LLC, a subsidiary of the Company (“GAC”), infringes a registered trademark of Roth Licensing pursuant to the Lanham Act, California Civil Code Section 3344.1, and certain other common law causes of action. On August 9, 2017, the arbitrator issued an interim decision on liability finding that GAC had willfully infringed the registered trademark of Roth Licensing. On November 8, 2017, the arbitrator served his Final Award on damages awarding Roth Licensing approximately $16.0 million for damages, attorneys’ fees and costs as well as injunctive relief regarding the ROTH mark and any reproduction, counterfeit, copy, or colorable imitation of the ROTH mark and Dr. Roth’s image. The Company believes that the arbitrator failed to follow the applicable arbitration procedures, and it has filed a Motion to Vacate Arbitration Award with the Eastern District of New York. On January 19, 2018, Futuredontics, Inc., a wholly-owned subsidiary of the Company, received service of a purported class action lawsuit filed in the Superior Court of the State of California, for the County of Los Angeles, brought by a former employee, Henry Olivares, on behalf of other similarly situated individuals. The plaintiff alleges several wage and hour violations under California Business and Professions Code Section 17200, including, but not limited to, failure to provide rest and meal break periods and the failure to pay overtime. The Company has filed its answer to the complaint and it intends to vigorously defend against this matter. In addition to the matters disclosed above, the Company is, from time to time, subject to a variety of litigation and similar proceedings incidental to its business. These legal matters primarily involve claims for damages arising out of the use of the Company’s products and services and claims relating to intellectual property matters including patent infringement, employment matters, tax matters, commercial disputes, competition and sales and trading practices, personal injury and insurance coverage. The Company may also become subject to lawsuits as a result of past or future acquisitions or as a result of liabilities retained from, or representations, warranties or indemnities provided in connection with, divested businesses. Some of these lawsuits may include claims for punitive and consequential, as well as compensatory damages. Based upon the Company’s experience, current information and applicable law, it does not believe that these proceedings and claims will have a material adverse effect on its consolidated results of operations, financial position or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’s business, financial condition, results of operations or liquidity. While the Company maintains general, product, property, workers’ compensation, automobile, cargo, aviation, crime, fiduciary and directors’ and officers’ liability insurance up to certain limits that cover certain of these claims, this insurance may be insufficient or unavailable to cover such losses. In addition, while the Company believes it is entitled to indemnification from third parties for some of these claims, these rights may also be insufficient or unavailable to cover such losses. Purchase Commitments From time to time, the Company enters into long-term inventory purchase commitments with minimum purchase requirements for raw materials and finished goods to ensure the availability of products for production and distribution. These commitments may have a significant impact on levels of inventory maintained by the Company. |
SIGNIFICANT ACCOUNTING POLICI22
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied; generally this occurs with the transfer of risk and/or control of Dental and Healthcare Consumables products (“consumable” products), Dental Technology products (“technology” products), or Dental Equipment products (“equipment” products). Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Sales, value add and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. For most of consumable, technology and equipment products, the Company transfers control and recognizes a sale when products are shipped from the manufacturing facility or warehouse to the customer (distributors and direct to dentists). For contracts with customers that contain destination shipping terms, revenue is not recognized until risk has transferred and the goods are delivered to the agreed upon destination. The amount of consideration received and revenue recognized varies with changes in marketing incentives (e.g., discounts, rebates, free goods) and returns offered to customers and their customers. When the Company gives customers the right to return eligible products and receive credit, returns are estimated based on an analysis of historical experience. However, returns of products, excluding warranty related returns, are infrequent and insignificant. The Company adjusts the estimate of revenue at the earlier of when the most likely amount of consideration can be estimated, the amount expected to be received changes, or when the consideration becomes fixed. Consideration received from customers in advance of revenue recognition is classified as deferred revenue. Depending on the terms of the arrangement, the Company will defer the recognition of a portion of the consideration received when performance obligations are not yet satisfied (e.g., extended maintenance/service contracts, software and licenses, customer loyalty points and coupon programs). The Company uses an observable price, typically average selling price, to determine the stand-alone selling price for separate performance obligations. The Company determines the stand-alone selling price, based on Company geographic sales locations’ database of pricing and discounting practices for the specific product or service when sold separately, and utilizes this data to arrive at average selling prices by product. Revenue is then allocated proportionately, based on the determined stand-alone selling price, to the unsatisfied performance obligation, which is deferred until satisfied. At March 31, 2018, the Company had $21.9 million of deferred revenue recorded in Accrued liabilities on the Consolidated Balance Sheets. The Company expects to recognize significantly all of the deferred revenue within the next twelve months. The Company has elected to account for shipping and handling activities as a fulfillment cost within the cost of products sold, and records shipping and handling costs collected from customers in net sales. The Company has adopted two practical expedients: the “right to invoice” practical expedient, which allows us to recognize revenue in the amount of the invoice when it corresponds directly with the value of performance completed to date; and relief from considering the existence of a significant financing component when the payment for the good or service is expected to be one year or less. The Company offers discounts to its customers and distributors if certain conditions are met. Discounts are primarily based on the volume of products purchased or targeted to be purchased by the customer. Discounts are deducted from revenue at the time of sale or when the discount is offered, whichever is later. The Company estimates volume discounts based on an individual customer’s historical and estimated future product purchases. Certain of the Company’s customers are offered cash rebates based on targeted sales increases. The Company estimates rebates based on the forecasted performance of a customer and their expected level of achievement within the rebate programs. In accounting for these rebate programs, the Company records an accrual and reduces sales ratably as sales occur over the rebate period. The Company updates the accruals for these rebate programs as actual results and updated forecasts impact the estimated achievement for customers within the rebate programs. A portion of the Company’s net sales is comprised of sales of precious metals generated through its precious metal dental alloy product offerings. As the precious metal content of the Company’s sales is largely a pass-through to customers, the Company uses its cost of precious metal purchased as a proxy for the precious metal content of sales, as the precious metal content of sales is not separately tracked and invoiced to customers. The Company believes that it is reasonable to use the cost of precious metal content purchased in this manner since precious metal alloy sale prices are typically adjusted when the prices of underlying precious metals change. |
Accounts and Notes Receivable | Accounts and Notes Receivable The Company records a provision for doubtful accounts, which is included in Selling, general and administrative expenses on the Consolidated Statements of Operations. |
Income Taxes | Income Taxes The Company has accounted for the tax effects of the Tax Cuts and Jobs Act, enacted on December 22, 2017, on a provisional basis. At December 31, 2017, the accounting for certain income tax effects was incomplete, but the Company determined reasonable estimates for those effects which were included in the financial statements. The Company expects to complete the accounting during 2018 in accordance with the one year measurement period. |
Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”, as amended (Topic 606, commonly referred to as ASC 606) to all contracts using the modified retrospective method. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Most of the Company’s sales revenue continues to be recognized when products are shipped from manufacturing facilities. For certain customer and dealer incentive programs, such as coupons, customer loyalty and free goods, the Company recognizes the proportionate revenue and cost of product when the incentives are shipped or awarded. Prior to adoption of ASC 606, costs for these types of programs were recognized when triggering events occurred. For contracts with customers where performance occurs over time, such as software sales, the Company recognizes revenue ratably over the performance period. The new revenue standard also provided additional guidance that resulted in reclassifications to or from Net sales, Cost of products sold, Selling, general and administrative expenses, and the resultant change in (benefit) provision for income taxes. The cumulative effect of the changes made on the Consolidated Balance Sheets at December 31, 2017 for the adoption of ASC 606, is as follows: (in millions) Consolidated Balance Sheets Item December 31, 2017 As Reported Balance Adoption of ASC 606 January 1, 2018 Revised Balance Assets Accounts and notes receivable-trade, net $ 746.2 $ 0.2 $ 746.4 Inventory, net 623.1 (0.3 ) 622.8 Prepaid expense and other current assets, net 312.6 1.9 314.5 Liabilities and Equity Accrued liabilities 585.8 9.9 595.7 Income taxes payable 54.2 (2.1 ) 52.1 Retained earnings 2,316.2 (6.0 ) 2,310.2 The impact of adoption of the new revenue recognition standard on the Company’s Consolidated Statements of Operations and Consolidated Balance Sheets is as follows: (in millions) Three Months Ended March 31, 2018 Consolidated Statements of Operations Item As Reported Balance Balances Without Adoption of ASC 606 Effect of Change Increase/(Decrease) Net sales $ 956.1 $ 954.0 $ 2.1 Cost of products sold 442.0 438.9 3.1 Selling, general and administrative expenses 435.2 435.8 (0.6 ) Provision for income taxes 13.7 13.8 (0.1 ) Net income attributable to Dentsply Sirona 81.2 81.5 (0.3 ) (in millions) Balance at March 31, 2018 Consolidated Balance Sheets Item As Reported Balance Balances Without Adoption of ASC 606 Effect of Change Increase/(Decrease) Assets Accounts and notes receivables-trade, net $ 670.4 $ 670.3 $ 0.1 Inventories, net 696.6 696.9 (0.3 ) Prepaid expenses and other current assets, net 316.4 315.2 1.2 Liabilities and Equity Accrued liabilities 531.7 522.2 9.5 Income taxes payable 54.3 56.5 (2.2 ) Retained earnings 2,375.9 2,382.2 (6.3 ) In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” This accounting standard seeks to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current US GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to a third party, which is an exception to the principle of comprehensive recognition of current and deferred income taxes in US GAAP. ASU No. 2016-16 eliminates this exception. The amendments in this update should be applied through the modified retrospective method with a cumulative-effect adjustment directly to retained earnings. The Company adopted this accounting standard during the three months ended March 31, 2018. Upon adoption, the Company made the following reclassification: (in millions) Consolidated Balance Sheets Item December 31, 2017 As Reported Balance Adoption of ASU 2016-16 Increase/(Decrease) January 1, 2018 Revised Balance Assets Prepaid expenses and other current assets, net $ 312.6 $ (5.6 ) $ 307.0 Other noncurrent assets, net 156.1 (73.1 ) 83.0 Liabilities and Equity Deferred income taxes 718.0 (76.0 ) 642.0 Retained earnings 2,316.2 (2.7 ) 2,313.5 In March 2017, the FASB issued ASU No. 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This newly issued accounting standard is primarily intended to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The amendments in this update require an employer to report the service cost component of net periodic benefit cost in operating income, while the interest cost, amortization, return on assets and any settlement or curtailment expense will be reported below operating income. More specifically, the service cost will be reported in the same line item as other compensation costs arising from the services rendered by the pertinent employee during the period. The amendments in this update are required for annual and interim periods beginning after December 15, 2017, and should be applied retrospectively for the presentation of the components of net periodic benefit cost and net periodic postretirement benefit cost in the income statement. The amendment allows a practical expedient that permits an employer to use the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The Company adopted this accounting standard during the three months ended March 31, 2018, and applied the practical expedient upon adoption. The impact of adopting this standard, by financial statement line item, is reflected below: (in millions) Consolidated Statements of Operations Item March 31, 2017 As Reported Adoption of 2017-07 Increase/(Decrease) March 31, 2017 Revised Cost of products sold $ 408.5 $ (0.5 ) $ 408.0 Gross profit 492.0 0.5 492.5 Selling, general and administrative expense 404.7 (1.7 ) 403.0 Operating income 84.2 2.2 86.4 Other expense (income), net (1.0 ) 2.2 1.2 In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This newly issued accounting standard allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from tax rate changes due to the Tax Cuts and Jobs Act. The amendments in this update are required for annual and interim periods beginning after December 15, 2018. This standard also requires the Company to disclose its accounting policy for releasing income tax effects from accumulated other comprehensive income. In general, the Company applies the individual item approach. As permitted by the accounting standard, the Company early adopted this accounting standard during the three months ended March 31, 2018. As a result of the adoption, the Company elected to reclassify the income tax effects from AOCI to Retained earnings and reclassified $7.6 million . Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This accounting standard seeks to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Current US GAAP does not require lessees to recognize assets and liabilities arising from operating leases on the balance sheet. This standard also provides guidance from the lessees’ perspective on how to determine if a lease is an operating lease or a financing lease and the differences in accounting for each. In January 2018, the FASB issued ASU No. 2018-01, which allows for an entity to elect an optional transition practical expedient for land easements that exist or expired before adoption of Topic 842. The adoption of this standard is required for interim and fiscal periods ending after December 15, 2018 and it is required to be applied using the modified retrospective approach. Early adoption is permitted. The Company is currently assessing the impact that this standard will have on its financial position, results of operations, cash flows and disclosures. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” This newly issued accounting standard improves the financial reporting and disclosure of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this update make improvements to simplify the application of the hedge accounting guidance in current US GAAP based on the feedback received from preparers, auditors, users and other stakeholders. More specifically, this update expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this update are required for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this update. The amended presentation and disclosure guidance is required only prospectively. The Company is currently assessing the impact that this standard will have on its financial position, results of operations, cash flows and disclosures. |
SIGNIFICANT ACCOUNTING POLICI23
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Adjustments to the Financial Statement Line Items Impact by this Accounting Update | The impact of adopting this standard, by financial statement line item, is reflected below: (in millions) Consolidated Statements of Operations Item March 31, 2017 As Reported Adoption of 2017-07 Increase/(Decrease) March 31, 2017 Revised Cost of products sold $ 408.5 $ (0.5 ) $ 408.0 Gross profit 492.0 0.5 492.5 Selling, general and administrative expense 404.7 (1.7 ) 403.0 Operating income 84.2 2.2 86.4 Other expense (income), net (1.0 ) 2.2 1.2 The cumulative effect of the changes made on the Consolidated Balance Sheets at December 31, 2017 for the adoption of ASC 606, is as follows: (in millions) Consolidated Balance Sheets Item December 31, 2017 As Reported Balance Adoption of ASC 606 January 1, 2018 Revised Balance Assets Accounts and notes receivable-trade, net $ 746.2 $ 0.2 $ 746.4 Inventory, net 623.1 (0.3 ) 622.8 Prepaid expense and other current assets, net 312.6 1.9 314.5 Liabilities and Equity Accrued liabilities 585.8 9.9 595.7 Income taxes payable 54.2 (2.1 ) 52.1 Retained earnings 2,316.2 (6.0 ) 2,310.2 The impact of adoption of the new revenue recognition standard on the Company’s Consolidated Statements of Operations and Consolidated Balance Sheets is as follows: (in millions) Three Months Ended March 31, 2018 Consolidated Statements of Operations Item As Reported Balance Balances Without Adoption of ASC 606 Effect of Change Increase/(Decrease) Net sales $ 956.1 $ 954.0 $ 2.1 Cost of products sold 442.0 438.9 3.1 Selling, general and administrative expenses 435.2 435.8 (0.6 ) Provision for income taxes 13.7 13.8 (0.1 ) Net income attributable to Dentsply Sirona 81.2 81.5 (0.3 ) (in millions) Balance at March 31, 2018 Consolidated Balance Sheets Item As Reported Balance Balances Without Adoption of ASC 606 Effect of Change Increase/(Decrease) Assets Accounts and notes receivables-trade, net $ 670.4 $ 670.3 $ 0.1 Inventories, net 696.6 696.9 (0.3 ) Prepaid expenses and other current assets, net 316.4 315.2 1.2 Liabilities and Equity Accrued liabilities 531.7 522.2 9.5 Income taxes payable 54.3 56.5 (2.2 ) Retained earnings 2,375.9 2,382.2 (6.3 ) The Company adopted this accounting standard during the three months ended March 31, 2018. Upon adoption, the Company made the following reclassification: (in millions) Consolidated Balance Sheets Item December 31, 2017 As Reported Balance Adoption of ASU 2016-16 Increase/(Decrease) January 1, 2018 Revised Balance Assets Prepaid expenses and other current assets, net $ 312.6 $ (5.6 ) $ 307.0 Other noncurrent assets, net 156.1 (73.1 ) 83.0 Liabilities and Equity Deferred income taxes 718.0 (76.0 ) 642.0 Retained earnings 2,316.2 (2.7 ) 2,313.5 |
STOCK COMPENSATION (Tables)
STOCK COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Based Compensation | The following table represents total stock based compensation expense for non-qualified stock options, restricted stock units (“RSU”) and the tax related benefit for the three months ended March 31, 2018 and 2017 . Three Months Ended (in millions) 2018 2017 Stock option expense $ 0.7 $ 2.7 RSU expense 8.3 7.7 Total stock based compensation expense $ 9.0 $ 10.4 Related deferred income tax benefit $ 1.8 $ 3.3 |
COMPREHENSIVE INCOME (Tables)
COMPREHENSIVE INCOME (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
COMPREHENSIVE INCOME [Abstract] | |
Schedule of Components of Comprehensive Income | The following table summarizes the components of comprehensive income, net of tax, for the three months ended March 31, 2018 and 2017 : Three Months Ended (in millions) 2018 2017 Foreign currency translation gains $ 84.0 $ 59.3 Foreign currency translation loss on hedges of net investments (18.9 ) (9.5 ) |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in AOCI, net of tax, by component for the three months ended March 31, 2018 and 2017 were as follows: (in millions) Foreign Currency Translation Gain (Loss) Gain and (Loss) on Derivative Financial Instruments Designated as Cash Flow Hedges Gain and (Loss) on Derivative Financial Instruments Net Unrealized Holding Gain (Loss) on Available-for-Sale Securities Pension Liability Gain (Loss) Total Balance, net of tax, at December 31, 2017 $ (104.5 ) $ (12.6 ) $ (127.6 ) $ 44.3 $ (90.6 ) $ (291.0 ) Other comprehensive income (loss) before reclassifications and tax impact 84.3 (7.0 ) (17.9 ) — — 59.4 Tax (expense) benefit (19.2 ) 1.3 9.3 — (8.6 ) Other comprehensive income (loss), net of tax, before reclassifications 65.1 (5.7 ) (8.6 ) — — 50.8 Amounts reclassified from accumulated other comprehensive income (loss), net of tax — 2.3 — (44.3 ) 1.2 (40.8 ) Net increase (decrease) in other comprehensive income 65.1 (3.4 ) (8.6 ) (44.3 ) 1.2 10.0 Balance, net of tax, at March 31, 2018 $ (39.4 ) $ (16.0 ) $ (136.2 ) $ — $ (89.4 ) $ (281.0 ) (in millions) Foreign Currency Translation Gain (Loss) Gain and (Loss) on Derivative Financial Instruments Designated as Cash Flow Hedges Gain and (Loss) on Derivative Financial Instruments Pension Liability Gain (Loss) Total Balance, net of tax, at December 31, 2016 $ (490.5 ) $ (3.2 ) $ (116.8 ) $ (95.2 ) $ (705.7 ) Other comprehensive (loss) income before reclassifications and tax impact 40.2 (1.7 ) (1.9 ) — 36.6 Tax (expense) benefit 9.6 0.6 (0.3 ) — 9.9 Other comprehensive (loss) income, net of tax, before reclassifications 49.8 (1.1 ) (2.2 ) — 46.5 Amounts reclassified from accumulated other comprehensive (loss) income, net of tax — — — 1.2 1.2 Net (decrease) increase in other comprehensive income 49.8 (1.1 ) (2.2 ) 1.2 47.7 Balance, net of tax, at March 31, 2017 $ (440.7 ) $ (4.3 ) $ (119.0 ) $ (94.0 ) $ (658.0 ) |
Reclassification Out of Accumulated Other Comprehensive Income | Reclassifications out of AOCI to the Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 were as follows: (in millions) Details about AOCI Components Amounts Reclassified from AOCI Affected Line Item on the Consolidated Statements of Operations Three Months Ended 2018 2017 Loss on derivative financial instruments: Interest rate swaps $ (0.6 ) $ (0.8 ) Interest expense Foreign exchange forward contracts (1.8 ) 0.5 Cost of products sold Net loss before tax (2.4 ) (0.3 ) Tax impact 0.1 — Provision for income taxes Net loss after tax $ (2.3 ) $ (0.3 ) Amortization of defined benefit pension and other postemployment benefit items: Amortization of net actuarial losses $ (1.7 ) $ (1.7 ) (a) Net loss before tax (1.7 ) (1.7 ) Tax impact 0.5 0.5 Provision for income taxes Net loss after tax $ (1.2 ) $ (1.2 ) Total reclassifications for the period $ (3.5 ) $ (1.5 ) (a) These AOCI components are included in the computation of net periodic benefit cost for the three months ended March 31, 2018 and 2017 (see Note 8 , Benefit Plans, for additional details). |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2018 and 2017 : Diluted Earnings Per Common Share Computation Three Months Ended (in millions, except per share amounts) 2018 2017 Net income attributable to Dentsply Sirona $ 81.2 $ 59.8 Weighted average common shares outstanding 227.2 230.1 Incremental weighted average shares from assumed exercise of dilutive options from stock-based compensation awards 2.7 3.9 Total weighted average diluted shares outstanding 229.9 234.0 Earnings per common share - diluted $ 0.35 $ 0.26 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of Intangible Assets Acquired | Intangible assets acquired consist of the following: (in millions, except for useful life) Weighted Average Useful Life Amount (in years) Customer relationships $ 18.1 15 Developed technology and patents 22.4 15 Trade names and trademarks 8.5 Indefinite Total $ 49.0 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Third Party Net Sales | The following tables set forth information about the Company’s segments for the three months ended March 31, 2018 and 2017 . Certain reclassifications have been made to prior years’ data in order to conform to current year presentation: Third Party Net Sales Three Months Ended (in millions) 2018 2017 Technologies & Equipment $ 508.3 $ 479.0 Consumables 447.8 421.5 Total net sales $ 956.1 $ 900.5 |
Third Party Net Sales, Excluding Precious Metal Content | Third Party Net Sales, Excluding Precious Metal Content Three Months Ended (in millions) 2018 2017 Technologies & Equipment $ 498.0 $ 467.9 Consumables 447.8 421.5 Total net sales, excluding precious metal content 945.8 889.4 Precious metal content of sales 10.3 11.1 Total net sales, including precious metal content $ 956.1 $ 900.5 |
Segment Adjusted Operating Income | Segment Adjusted Operating Income Three Months Ended (in millions) 2018 2017 Technologies & Equipment $ 74.8 $ 54.0 Consumables 107.1 116.0 Segment adjusted operating income before income taxes and interest 181.9 170.0 Reconciling items expense (income): All Other (a) 51.3 36.0 Restructuring and other costs 10.2 3.1 Interest expense 8.6 9.3 Interest income (0.6 ) (0.7 ) Other expense (income), net (34.1 ) (1.0 ) Amortization of intangible assets 49.9 45.2 Depreciation resulting from the fair value step-up of property, plant and equipment from business combinations 1.8 1.5 Income before income taxes $ 94.8 $ 76.6 (a) Includes the results of unassigned Corporate headquarter costs, inter-segment eliminations and one distribution warehouse not managed by named segments |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, net of inventory valuation reserves, consist of the following: (in millions) March 31, 2018 December 31, 2017 Finished goods $ 452.3 $ 387.6 Work-in-process 94.6 90.4 Raw materials and supplies 149.7 145.1 Inventories, net $ 696.6 $ 623.1 |
BENEFIT PLANS (Tables)
BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Components of Net Periodic Benefit Cost | The following sets forth the components of net periodic benefit cost of the Company’s defined benefit plans for the three months ended March 31, 2018 and 2017 : Defined Benefit Plans Three Months Ended Location on (in millions) 2018 2017 (a) Consolidated Statements of Operations Service cost $ 1.8 $ 1.7 Cost of products sold Service cost 2.4 2.1 Selling, general and administrative expenses Interest cost 1.7 1.7 Other expense (income), net Expected return on plan assets (1.4 ) (1.1 ) Other expense (income), net Amortization of net actuarial loss 1.7 1.6 Other expense (income), net Net periodic benefit cost $ 6.2 $ 6.0 (a) Prior period presented reflects adoption of ASU 2017-07. For further discussion on the reclassification, refer to Note 1, Significant Accounting Policies. |
Information Related to the Contributions to the Company's Benefit Plans | The following sets forth the information related to the contributions to the Company’s defined benefit plans for 2018 : (in millions) Pension Benefits Actual contributions through March 31, 2018 $ 3.5 Expected contributions for the remainder of the year 12.8 Total actual and expected contributions $ 16.3 |
RESTRUCTURING AND OTHER COSTS (
RESTRUCTURING AND OTHER COSTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Accruals | At March 31, 2018 , the Company’s restructuring accruals were as follows: Severance (in millions) 2016 and 2017 Plans 2018 Plans Total Balance at December 31, 2017 $ 7.7 $ 48.2 $ — $ 55.9 Provisions 0.2 (1.6 ) 8.4 7.0 Amounts applied (1.5 ) (4.2 ) (5.1 ) (10.8 ) Change in estimates — (0.2 ) — (0.2 ) Balance at March 31, 2018 $ 6.4 $ 42.2 $ 3.3 $ 51.9 Lease/Contract Terminations (in millions) 2016 and 2017 Plans 2018 Plans Total Balance at December 31, 2017 $ 0.3 $ 0.2 $ — $ 0.5 Provisions 0.1 — 0.1 0.2 Amounts applied (0.4 ) — (0.1 ) (0.5 ) Balance at March 31, 2018 $ — $ 0.2 $ — $ 0.2 Other Restructuring Costs (in millions) 2016 and 2017 Plans 2018 Plans Total Balance at December 31, 2017 $ 2.0 $ 1.7 $ — $ 3.7 Provisions — 0.3 0.1 0.4 Amounts applied (0.1 ) (0.1 ) (0.1 ) (0.3 ) Balance at March 31, 2018 $ 1.9 $ 1.9 $ — $ 3.8 |
Cumulative Amounts for the Provisions and Adjustments and Amounts Applied for All the Plans by Segment | The following table provides the year-to-date changes in the restructuring accruals by segment: (in millions) December 31, 2017 Provisions Amounts Applied Change in Estimates March 31, 2018 Technologies & Equipment $ 13.3 $ 2.4 $ (5.4 ) $ — $ 10.3 Consumables 46.8 0.2 (4.0 ) (0.2 ) 42.8 All Other — 5.0 (2.2 ) — 2.8 Total $ 60.1 $ 7.6 $ (11.6 ) $ (0.2 ) $ 55.9 |
FINANCIAL INSTRUMENTS AND DER32
FINANCIAL INSTRUMENTS AND DERIVATIVES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative [Line Items] | |
Schedule of Derivative Instruments | The following table summarizes the notional amounts of cash flow hedges by derivative instrument type at March 31, 2018 and the notional amounts expected to mature during the next 12 months, with a discussion of the various cash flow hedges by derivative instrument type following the table: Aggregate Notional Amount Aggregate Notional Amount Maturing within 12 Months (in millions) Foreign exchange forward contracts $ 349.1 $ 279.5 Interest rate swaps 118.2 — Total derivative instruments designated as cash flow hedges $ 467.3 $ 279.5 |
Schedule of Aggregate Notional Amounts of Economic Hedges Not Designated as Hedges | The following table summarizes the notional amount of hedges of net investments by derivative instrument at March 31, 2018 and the notional amounts expected to mature during the next 12 months: Aggregate Aggregate Notional Amount Maturing within 12 Months (in millions) Foreign exchange forward contracts $ 632.0 $ 315.1 Cross currency basis swaps 302.6 — Total for instruments not designated as hedges $ 934.6 $ 315.1 The following tables summarize the aggregate notional amounts of the Company’s economic hedges not designated as hedges by derivative instrument types at March 31, 2018 and the notional amounts expected to mature during the next 12 months: Aggregate Notional Amount Aggregate Notional Amount Maturing within 12 Months (in millions) Foreign exchange forward contracts $ 364.4 $ 364.4 Total for instruments not designated as hedges $ 364.4 $ 364.4 |
Derivative Instruments, Gain (Loss) | The following table summarizes the amounts of gains (losses) recorded on the Company’s Consolidated Statements of Operations related to the economic hedges not designated as hedging for the three months ended March 31, 2018 and 2017 : Consolidated Statements of Operations Location Gain (Loss) Recognized Three Months Ended (in millions) 2018 2017 Foreign exchange forward contracts (a) Other expense (income), net $ 0.7 $ (2.8 ) Total for instruments not designated as hedges $ 0.7 $ (2.8 ) (a) The gains and losses on these derivative transactions offset the gains and losses generated by the revaluation of the underlying non-functional currency balances which are recorded in Other expense (income), net on the Consolidated Statements of Operations. |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following tables summarize the fair value and the location of the Company’s derivatives on the Consolidated Balance Sheets at March 31, 2018 and December 31, 2017 : March 31, 2018 (in millions) Prepaid Expenses and Other Current Assets, Net Other Noncurrent Assets, Net Accrued Liabilities Other Noncurrent Liabilities Designated as Hedges Foreign exchange forward contracts $ 0.9 $ 0.2 $ 19.6 $ 7.8 Interest rate swaps — — 0.3 0.1 Cross currency basis swaps — — — 12.9 Total $ 0.9 $ 0.2 $ 19.9 $ 20.8 Not Designated as Hedges Foreign exchange forward contracts $ 1.6 $ — $ 5.2 $ — Total $ 1.6 $ — $ 5.2 $ — December 31, 2017 (in millions) Prepaid Other Noncurrent Assets, Net Accrued Liabilities Other Noncurrent Liabilities Designated as Hedges Foreign exchange forward contracts $ 1.4 $ — $ 13.4 $ 4.5 Interest rate swaps — — 0.3 0.1 Total $ 1.4 $ — $ 13.7 $ 4.6 Not Designated as Hedges Foreign exchange forward contracts $ 3.4 $ — $ 3.7 $ — Total $ 3.4 $ — $ 3.7 $ — |
Offsetting Derivative Assets and Liabilities | Offsetting of financial assets and liabilities under netting arrangements at March 31, 2018 : Gross Amounts Not Offset on the Consolidated Balance Sheets (in millions) Gross Amounts Recognized Gross Amount Offset on the Consolidated Balance Sheets Net Amounts Presented on the Consolidated Balance Sheets Financial Instruments Cash Collateral Received/Pledged Net Amount Assets Foreign exchange forward contracts $ 2.7 $ — $ 2.7 $ (2.6 ) $ — $ 0.1 Total Assets $ 2.7 $ — $ 2.7 $ (2.6 ) $ — $ 0.1 Gross Amounts Not Offset on the Consolidated Balance Sheets (in millions) Gross Amounts Recognized Gross Amount Offset on the Consolidated Balance Sheets Net Amounts Presented on the Consolidated Balance Sheets Financial Instruments Cash Collateral Received/Pledged Net Amount Liabilities Foreign exchange forward contracts $ 32.6 $ — $ 32.6 $ (1.5 ) $ — $ 31.1 Interest rate swaps 0.4 — 0.4 (0.1 ) — 0.3 Cross currency basis swaps 12.9 — 12.9 (1.0 ) — 11.9 Total Liabilities $ 45.9 $ — $ 45.9 $ (2.6 ) $ — $ 43.3 Offsetting of financial assets and liabilities under netting arrangements at December 31, 2017 : Gross Amounts Not Offset on the Consolidated Balance Sheets (in millions) Gross Amounts Recognized Gross Amount Offset on the Consolidated Balance Sheets Net Amounts Presented on the Consolidated Balance Sheets Financial Instruments Cash Collateral Received/Pledged Net Amount Assets Foreign exchange forward contracts $ 4.8 $ — $ 4.8 $ (3.9 ) $ — $ 0.9 Total Assets $ 4.8 $ — $ 4.8 $ (3.9 ) $ — $ 0.9 Gross Amounts Not Offset on the Consolidated Balance Sheets (in millions) Gross Amounts Recognized Gross Amount Offset on the Consolidated Balance Sheets Net Amounts Presented on the Consolidated Balance Sheets Financial Instruments Cash Collateral Received/Pledged Net Amount Liabilities Foreign exchange forward contracts $ 21.6 $ — $ 21.6 $ (3.8 ) $ — $ 17.8 Interest rate swaps 0.4 — 0.4 (0.1 ) — 0.3 Total Liabilities $ 22.0 $ — $ 22.0 $ (3.9 ) $ — $ 18.1 |
Cash Flow Hedging | |
Derivative [Line Items] | |
Schedule of Derivative Instruments | The following tables summarize the amount of gains (losses) recorded in AOCI on the Consolidated Balance Sheets and income (expense) on the Company’s Consolidated Statements of Operations related to all cash flow hedges for the three months ended March 31, 2018 and 2017 : March 31, 2018 Gain (Loss) in AOCI Consolidated Statements of Operations Location Effective Portion Reclassified from AOCI into Income (Expense) Ineffective Portion Recognized in Income (Expense) (in millions) Effective Portion: Interest rate swaps $ — Interest expense $ (0.6 ) $ — Foreign exchange forward contracts (7.0 ) Cost of products sold (1.8 ) — Ineffective Portion: Foreign exchange forward contracts — Other expense (income), net — (0.1 ) Total in cash flow hedging $ (7.0 ) $ (2.4 ) $ (0.1 ) March 31, 2017 Gain (Loss) in AOCI Consolidated Statements of Operations Location Effective Portion Reclassified from AOCI into Income (Expense) Ineffective Portion Recognized in Income (Expense) (in millions) Effective Portion: Interest rate swaps $ (0.2 ) Interest expense $ (0.8 ) $ — Foreign exchange forward contracts (1.5 ) Cost of products sold 0.5 — Ineffective Portion: Foreign exchange forward contracts — Other expense (income), net — (0.3 ) Total for cash flow hedging $ (1.7 ) $ (0.3 ) $ (0.3 ) |
Net Investment Hedging | |
Derivative [Line Items] | |
Schedule of Derivative Instruments | The following tables summarize the amount of gains (losses) recorded in AOCI on the Consolidated Balance Sheets and Other expense (income), net on the Company’s Consolidated Statements of Operations related to the hedges of net investments for the three months ended March 31, 2018 and 2017 : March 31, 2018 Gain (Loss) in AOCI Consolidated Statements of Operations Location Recognized in Income (Expense) (in millions) Effective Portion: Cross currency basis swaps $ (6.4 ) Interest expense $ 1.7 Other expense (income), net (6.6 ) Foreign exchange forward contracts (11.5 ) Other expense (income), net 1.5 Total for net investment hedging $ (17.9 ) $ (3.4 ) March 31, 2017 Gain (Loss) in AOCI Consolidated Statements of Operations Location Recognized in Income (Expense) (in millions) Effective Portion: Foreign exchange forward contracts $ (1.9 ) Other expense (income), net $ 0.5 Total for net investment hedging $ (1.9 ) $ 0.5 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities that are Recorded at Fair Value and Classified Based on the Lowest Level of Input | The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2018 and December 31, 2017 : March 31, 2018 (in millions) Total Level 1 Level 2 Level 3 Assets Foreign exchange forward contracts $ 2.7 $ — $ 2.7 $ — Total assets $ 2.7 $ — $ 2.7 $ — Liabilities Interest rate swaps $ 0.4 $ — $ 0.4 $ — Cross currency basis swaps 12.9 — 12.9 — Foreign exchange forward contracts 32.6 — 32.6 — Contingent considerations on acquisitions 9.1 — — 9.1 Total liabilities $ 55.0 $ — $ 45.9 $ 9.1 December 31, 2017 (in millions) Total Level 1 Level 2 Level 3 Assets Foreign exchange forward contracts $ 4.8 $ — $ 4.8 $ — Available-for-sale security 54.4 — 54.4 — Total assets $ 59.2 $ — $ 59.2 $ — Liabilities Interest rate swaps $ 0.4 $ — $ 0.4 $ — Foreign exchange forward contracts 21.6 — 21.6 — Contingent considerations on acquisitions 8.6 — — 8.6 Total liabilities $ 30.6 $ — $ 22.0 $ 8.6 |
Reconciliation of Level 3 Holdings Measured at Fair Value on a Recurring Basis Using Unobservable Inputs | The following table presents a reconciliation of the Company’s Level 3 holdings measured at fair value on a recurring basis using unobservable inputs: Earn-out (in millions) Obligations Balance at December 31, 2017 $ 8.6 Fair value adjustment: Reported in Other expense (income), net 0.2 Effect of exchange rate changes 0.3 Balance at March 31, 2018 $ 9.1 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill | A reconciliation of changes in the Company’s goodwill by reportable segment is as follows: (in millions) Technologies & Equipment Consumables Total Balance at December 31, 2017 $ 3,660.6 $ 878.6 $ 4,539.2 Acquisition related additions — 3.7 3.7 Measurement period adjustments on prior acquisitions — 0.5 0.5 Effects of exchange rate changes 23.5 6.3 29.8 Balance at March 31, 2018 $ 3,684.1 $ 889.1 $ 4,573.2 The following table provides the gross carrying amount of goodwill and the cumulative goodwill impairment: March 31, 2018 December 31, 2017 (in millions) Gross Carrying Amount Cumulative Impairment Net Carrying Amount Gross Carrying Amount Cumulative Impairment Net Carrying Amount Technologies & Equipment $ 5,335.0 $ (1,650.9 ) $ 3,684.1 $ 5,311.5 $ (1,650.9 ) $ 3,660.6 |
Schedule of Definite-lived and Indefinite-lived Intangible Assets | Identifiable definite-lived and indefinite-lived intangible assets consist of the following: March 31, 2018 December 31, 2017 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents and developed technology $ 1,420.3 $ (338.9 ) $ 1,081.4 $ 1,385.5 $ (305.0 ) $ 1,080.5 Trademarks 76.4 (47.9 ) 28.5 76.4 (46.5 ) 29.9 Licensing agreements 34.5 (25.2 ) 9.3 31.2 (24.8 ) 6.4 Customer relationships 1,127.1 (295.6 ) 831.5 1,109.1 (272.0 ) 837.1 Total definite-lived $ 2,658.3 $ (707.6 ) $ 1,950.7 $ 2,602.2 $ (648.3 ) $ 1,953.9 Indefinite-lived tradenames and trademarks $ 860.7 $ — $ 860.7 $ 846.8 $ — $ 846.8 Total identifiable intangible assets $ 3,519.0 $ (707.6 ) $ 2,811.4 $ 3,449.0 $ (648.3 ) $ 2,800.7 |
SIGNIFICANT ACCOUNTING POLICI35
SIGNIFICANT ACCOUNTING POLICIES - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Significant Accounting Policies [Line Items] | |||
Deferred revenue | $ 21.9 | ||
Reclassification on adoption of ASU | $ 0 | ||
DIO Corporation | |||
Significant Accounting Policies [Line Items] | |||
Proceeds from sale of direct investment | 54.1 | ||
Gain realized on cost-method investment | 44.1 | ||
Unrealized gain in accumulated other comprehensive income | $ 45 | ||
Fair value of direct investment | 54.4 | ||
Trade Accounts Receivable | |||
Significant Accounting Policies [Line Items] | |||
Allowance for doubtful accounts and trade discounts | $ 25 | 22.4 | |
ASU 2018-02 | |||
Significant Accounting Policies [Line Items] | |||
Reclassification on adoption of ASU | 7.6 | ||
AOCI including portion attributable to noncontrolling interest | ASU 2018-02 | |||
Significant Accounting Policies [Line Items] | |||
Reclassification on adoption of ASU | (7.6) | ||
Retained Earnings | |||
Significant Accounting Policies [Line Items] | |||
Reclassification on adoption of ASU | $ (1) | ||
Retained Earnings | ASU 2018-02 | |||
Significant Accounting Policies [Line Items] | |||
Reclassification on adoption of ASU | $ 7.6 |
SIGNIFICANT ACCOUNTING POLICI36
SIGNIFICANT ACCOUNTING POLICIES - ACCOUNTING ADJUSTMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Assets | ||||
Accounts and notes receivables-trade, net | $ 670.4 | $ 746.2 | ||
Inventories, net | 696.6 | 623.1 | ||
Prepaid expenses and other current assets, net | 316.4 | 312.6 | ||
Other noncurrent assets, net | 99.5 | 156.1 | ||
Liabilities and Equity | ||||
Accrued liabilities | 531.7 | 585.8 | ||
Income taxes payable | 54.3 | 54.2 | ||
Deferred income taxes | 641.4 | 718 | ||
Retained earnings | 2,375.9 | 2,316.2 | ||
Income Statement | ||||
Net sales | 956.1 | $ 900.5 | ||
Cost of products sold | 442 | 408.5 | ||
Selling, general and administrative expenses | 435.2 | 404.7 | ||
Provision for income taxes | 13.7 | 16.9 | ||
Net income attributable to Dentsply Sirona | 81.2 | 59.8 | ||
Gross profit | 514.1 | 492 | ||
Operating income | 68.7 | 84.2 | ||
Other expense (income), net | (34.1) | (1) | ||
Balances Without Adoption of ASC 606 | ||||
Assets | ||||
Accounts and notes receivables-trade, net | 670.3 | 746.2 | ||
Inventories, net | 696.9 | 623.1 | ||
Prepaid expenses and other current assets, net | 315.2 | 312.6 | ||
Liabilities and Equity | ||||
Accrued liabilities | 522.2 | 585.8 | ||
Income taxes payable | 56.5 | 54.2 | ||
Retained earnings | 2,382.2 | $ 2,316.2 | ||
Income Statement | ||||
Net sales | 954 | |||
Cost of products sold | 438.9 | |||
Selling, general and administrative expenses | 435.8 | |||
Provision for income taxes | 13.8 | |||
Net income attributable to Dentsply Sirona | 81.5 | |||
Revised | ||||
Income Statement | ||||
Cost of products sold | 408 | |||
Selling, general and administrative expenses | 403 | |||
Gross profit | 492.5 | |||
Operating income | 86.4 | |||
Other expense (income), net | 1.2 | |||
Accounting Standards Update 2014-09 | ||||
Assets | ||||
Accounts and notes receivables-trade, net | $ 746.4 | |||
Inventories, net | 622.8 | |||
Prepaid expenses and other current assets, net | 314.5 | |||
Liabilities and Equity | ||||
Accrued liabilities | 595.7 | |||
Income taxes payable | 52.1 | |||
Retained earnings | 2,310.2 | |||
Accounting Standards Update 2014-09 | Effect of Change Increase/(Decrease) | ||||
Assets | ||||
Accounts and notes receivables-trade, net | 0.1 | 0.2 | ||
Inventories, net | (0.3) | (0.3) | ||
Prepaid expenses and other current assets, net | 1.2 | 1.9 | ||
Liabilities and Equity | ||||
Accrued liabilities | 9.5 | 9.9 | ||
Income taxes payable | (2.2) | (2.1) | ||
Retained earnings | (6.3) | (6) | ||
Income Statement | ||||
Net sales | 2.1 | |||
Cost of products sold | 3.1 | |||
Selling, general and administrative expenses | (0.6) | |||
Provision for income taxes | (0.1) | |||
Net income attributable to Dentsply Sirona | $ (0.3) | |||
Accounting Standards Update 2016-16 | ||||
Assets | ||||
Prepaid expenses and other current assets, net | 307 | |||
Other noncurrent assets, net | 83 | |||
Liabilities and Equity | ||||
Deferred income taxes | 642 | |||
Retained earnings | 2,313.5 | |||
Accounting Standards Update 2016-16 | Classification Adjustment As Revised | ||||
Assets | ||||
Prepaid expenses and other current assets, net | (5.6) | |||
Other noncurrent assets, net | (73.1) | |||
Liabilities and Equity | ||||
Deferred income taxes | (76) | |||
Retained earnings | $ (2.7) | |||
Accounting Standards Update 2017-07 | Classification Adjustment As Revised | ||||
Income Statement | ||||
Cost of products sold | (0.5) | |||
Selling, general and administrative expenses | (1.7) | |||
Gross profit | 0.5 | |||
Operating income | 2.2 | |||
Other expense (income), net | $ 2.2 |
STOCK COMPENSATION (Details)
STOCK COMPENSATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 9 | $ 10.4 |
Related deferred income tax benefit | 1.8 | 3.3 |
Selling, general and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | 7 | 10.1 |
Cost of Products Sold | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | 0.3 | 0.3 |
Restructuring and Other Costs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | 1.7 | |
Stock option expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | 0.7 | 2.7 |
RSU expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 8.3 | $ 7.7 |
COMPREHENSIVE INCOME - SUMMARY
COMPREHENSIVE INCOME - SUMMARY OF COMPREHENSIVE INCOME, NET OF TAX (Details) - Foreign Currency Translation Gain (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Statement of Income Captions [Line Items] | ||
Foreign currency translation gains | $ 84 | $ 59.3 |
Net Investment Hedging | ||
Condensed Statement of Income Captions [Line Items] | ||
Foreign currency translation losses | $ (18.9) | $ (9.5) |
COMPREHENSIVE INCOME - BALANCES
COMPREHENSIVE INCOME - BALANCES INCLUDED IN AOCI, NET OF TAX, IN THE CONSOLIDATED BALANCE SHEETS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | $ 6,627.9 | $ 8,125.9 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 3.5 | 1.5 |
Total other comprehensive income, net of tax | 10.6 | 47.6 |
Ending Balance | 6,705.2 | 8,163.6 |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (291) | (705.7) |
Other comprehensive income (loss) before reclassifications and tax impact | 59.4 | 36.6 |
Tax (expense) benefit | (8.6) | 9.9 |
Other comprehensive income (loss), net of tax, before reclassifications | 50.8 | 46.5 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (40.8) | 1.2 |
Total other comprehensive income, net of tax | 10 | 47.7 |
Ending Balance | (281) | (658) |
Foreign Currency Translation Gain (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (104.5) | (490.5) |
Other comprehensive income (loss) before reclassifications and tax impact | 84.3 | 40.2 |
Tax (expense) benefit | (19.2) | 9.6 |
Other comprehensive income (loss), net of tax, before reclassifications | 65.1 | 49.8 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Total other comprehensive income, net of tax | 65.1 | 49.8 |
Ending Balance | (39.4) | (440.7) |
Gain and (Loss) on Derivative Financial Instruments Designated as Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (12.6) | (3.2) |
Other comprehensive income (loss) before reclassifications and tax impact | (7) | (1.7) |
Tax (expense) benefit | 1.3 | 0.6 |
Other comprehensive income (loss), net of tax, before reclassifications | (5.7) | (1.1) |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 2.3 | 0 |
Total other comprehensive income, net of tax | (3.4) | (1.1) |
Ending Balance | (16) | (4.3) |
Gain and (Loss) on Derivative Financial Instruments | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (127.6) | (116.8) |
Other comprehensive income (loss) before reclassifications and tax impact | (17.9) | (1.9) |
Tax (expense) benefit | 9.3 | (0.3) |
Other comprehensive income (loss), net of tax, before reclassifications | (8.6) | (2.2) |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Total other comprehensive income, net of tax | (8.6) | (2.2) |
Ending Balance | (136.2) | (119) |
Net Unrealized Holding Gain (Loss) on Available-for-Sale Securities | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | 44.3 | |
Other comprehensive income (loss) before reclassifications and tax impact | 0 | |
Other comprehensive income (loss), net of tax, before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (44.3) | |
Total other comprehensive income, net of tax | (44.3) | |
Ending Balance | 0 | |
Pension Liability Gain (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (90.6) | (95.2) |
Other comprehensive income (loss) before reclassifications and tax impact | 0 | 0 |
Tax (expense) benefit | 0 | 0 |
Other comprehensive income (loss), net of tax, before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 1.2 | 1.2 |
Total other comprehensive income, net of tax | 1.2 | 1.2 |
Ending Balance | $ (89.4) | $ (94) |
COMPREHENSIVE INCOME - RECLASSI
COMPREHENSIVE INCOME - RECLASSIFICATION OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Reclassification of Acuumulated Other Comprehensive Income [Line Items] | ||
Interest expense | $ (8.6) | $ (9.3) |
Cost of products sold | (442) | (408.5) |
Net loss before tax | 94.8 | 76.6 |
Provision for income taxes | (13.7) | (16.9) |
Net income | 81.1 | 59.7 |
Reclassification net, gain (loss) after tax | (3.5) | (1.5) |
Gain and (loss) on derivative financial instruments | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification of Acuumulated Other Comprehensive Income [Line Items] | ||
Net loss before tax | (2.4) | (0.3) |
Provision for income taxes | 0.1 | 0 |
Net income | (2.3) | (0.3) |
Gain and (loss) on derivative financial instruments | Reclassification out of Accumulated Other Comprehensive Income | Interest rate swaps | ||
Reclassification of Acuumulated Other Comprehensive Income [Line Items] | ||
Interest expense | (0.6) | (0.8) |
Gain and (loss) on derivative financial instruments | Reclassification out of Accumulated Other Comprehensive Income | Foreign exchange forward contracts | ||
Reclassification of Acuumulated Other Comprehensive Income [Line Items] | ||
Cost of products sold | (1.8) | 0.5 |
Pension Liability Gain (Loss) | ||
Reclassification of Acuumulated Other Comprehensive Income [Line Items] | ||
Amortization of defined benefit pension and other postemployment benefit items | (1.7) | (1.7) |
Provision for income taxes | 0.5 | 0.5 |
Reclassification net, gain (loss) after tax | (1.2) | (1.2) |
Amortization of net actuarial losses | ||
Reclassification of Acuumulated Other Comprehensive Income [Line Items] | ||
Amortization of defined benefit pension and other postemployment benefit items | $ (1.7) | $ (1.7) |
COMPREHENSIVE INCOME - ADDITION
COMPREHENSIVE INCOME - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||||
Cumulative foreign currency translation adjustment gain (loss) | $ 6,705.2 | $ 6,627.9 | $ 8,163.6 | $ 8,125.9 |
Foreign Currency Translation Gain (Loss) | ||||
Derivative [Line Items] | ||||
Foreign currency tax adjustment | 195.2 | 203.8 | ||
Cumulative foreign currency translation adjustment gain (loss) | (39.4) | (104.5) | $ (440.7) | $ (490.5) |
Accumulated Foreign Currency Adjustment Including Portion Attributable to Noncontrolling Interest, Translation Gain (Loss) | ||||
Derivative [Line Items] | ||||
Cumulative foreign currency translation adjustment gain (loss) | 106.1 | 22.1 | ||
Accumulated Foreign Currency Adjustment Including Portion Attributable to Noncontrolling Interest, Net Investment Hedges | ||||
Derivative [Line Items] | ||||
Cumulative foreign currency translation adjustment gain (loss) | $ (145.5) | $ (126.6) |
EARNINGS PER COMMON SHARE - COM
EARNINGS PER COMMON SHARE - COMPUTATION OF BASIC AND DILUTED EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net income attributable to Dentsply Sirona | $ 81.2 | $ 59.8 |
Weighted average common shares outstanding (in shares) | 227.2 | 230.1 |
Incremental weighted average shares from assumed exercise of dilutive options from stock-based compensation awards (in shares) | 2.7 | 3.9 |
Total weighted average diluted shares outstanding (in shares) | 229.9 | 234 |
Earnings per common share - diluted (in dollars per share) | $ 0.35 | $ 0.26 |
EARNINGS PER COMMON SHARE - ADD
EARNINGS PER COMMON SHARE - ADDITIONAL INFORMATION (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Antidilutive common stock options not included in the computation of diluted earnings per common share (in shares) | 1.6 | 0.8 |
BUSINESS COMBINATIONS - SUMMARY
BUSINESS COMBINATIONS - SUMMARY OF INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets, net | $ 2,811.4 | $ 2,800.7 | |
RTD | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets, net | $ 49 | ||
RTD | Trade names and trademarks | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets acquired, amount | 8.5 | ||
RTD | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired, amount | $ 18.1 | ||
Intangible assets acquired, useful life (in years) | 15 years | ||
RTD | Developed technology and patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired, amount | $ 22.4 | ||
Intangible assets acquired, useful life (in years) | 15 years |
BUSINESS COMBINATIONS - ADDITIO
BUSINESS COMBINATIONS - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions | May 01, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 4,573.2 | $ 4,539.2 | ||
RTD | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | $ 132 | |||
Goodwill | $ 83.9 | |||
OraMetrix, Inc. | Subsequent Event | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | $ 90 | |||
Additional payments subject to meeting earn-out provisions | $ 60 |
SEGMENT INFORMATION - ADDITIONA
SEGMENT INFORMATION - ADDITIONAL INFORMATION (Details) - segment | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Number of operating groups | 2 | |
Dental Products | ||
Segment Reporting Information [Line Items] | ||
Percentage of sales, professional dental products (as a percent) | 92.00% | 92.00% |
SEGMENT INFORMATION - THIRD PAR
SEGMENT INFORMATION - THIRD PARTY NET SALES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, Major Customer [Line Items] | ||
Net sales | $ 956.1 | $ 900.5 |
Technologies & Equipment | ||
Revenue, Major Customer [Line Items] | ||
Net sales | 508.3 | 479 |
Consumables | ||
Revenue, Major Customer [Line Items] | ||
Net sales | $ 447.8 | $ 421.5 |
SEGMENT INFORMATION - THIRD P48
SEGMENT INFORMATION - THIRD PARTY NET SALES, EXCLUDING PRECIOUS METAL CONTENT (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, Major Customer [Line Items] | ||
Net Sales, including precious metal content | $ 956.1 | $ 900.5 |
Technologies & Equipment | ||
Revenue, Major Customer [Line Items] | ||
Net Sales, including precious metal content | 508.3 | 479 |
Consumables | ||
Revenue, Major Customer [Line Items] | ||
Net Sales, including precious metal content | 447.8 | 421.5 |
Operating Segments | ||
Revenue, Major Customer [Line Items] | ||
Net Sales, including precious metal content | 945.8 | 889.4 |
Operating Segments | Technologies & Equipment | ||
Revenue, Major Customer [Line Items] | ||
Net Sales, including precious metal content | 498 | 467.9 |
Operating Segments | Consumables | ||
Revenue, Major Customer [Line Items] | ||
Net Sales, including precious metal content | 447.8 | 421.5 |
Segment Reconciling Items | ||
Revenue, Major Customer [Line Items] | ||
Net Sales, including precious metal content | $ 10.3 | $ 11.1 |
SEGMENT INFORMATION - SEGMENT A
SEGMENT INFORMATION - SEGMENT ADJUSTED OPERATING INCOME (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment operating income | $ 68.7 | $ 84.2 |
Restructuring and other costs | 10.2 | 3.1 |
Interest expense | 8.6 | 9.3 |
Interest income | (0.6) | (0.7) |
Other expense (income), net | (34.1) | (1) |
Amortization of intangible assets | 49.9 | 45.2 |
Income before income taxes | 94.8 | 76.6 |
Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment operating income | 181.9 | 170 |
Operating Segments | Technologies & Equipment | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment operating income | 74.8 | 54 |
Operating Segments | Consumables | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment operating income | 107.1 | 116 |
All Other | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
All Other | 51.3 | 36 |
Segment Reconciling Items | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Restructuring and other costs | 10.2 | 3.1 |
Interest expense | 8.6 | 9.3 |
Interest income | (0.6) | (0.7) |
Other expense (income), net | (34.1) | (1) |
Amortization of intangible assets | 49.9 | 45.2 |
Depreciation resulting from the fair value step-up of property, plant and equipment from business combinations | $ 1.8 | $ 1.5 |
INVENTORIES - ADDITIONAL INFORM
INVENTORIES - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
LIFO inventory amount | $ 12.5 | $ 12.4 |
Inventory, LIFO reserve | 8.3 | 10.6 |
Inventory valuation reserve | $ 79.9 | $ 71.7 |
INVENTORIES - SUMMARY OF INVENT
INVENTORIES - SUMMARY OF INVENTORY (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 452.3 | $ 387.6 |
Work-in-process | 94.6 | 90.4 |
Raw materials and supplies | 149.7 | 145.1 |
Inventories, net | $ 696.6 | $ 623.1 |
BENEFIT PLANS - COMPONENTS OF N
BENEFIT PLANS - COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - Defined Benefit Plans - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Interest cost | $ 1.7 | $ 1.7 |
Expected return on plan assets | (1.4) | (1.1) |
Amortization of net actuarial loss | 1.7 | 1.6 |
Net periodic benefit cost | 6.2 | 6 |
Cost of products sold | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | 1.8 | 1.7 |
Selling, general and administrative expenses | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $ 2.4 | $ 2.1 |
BENEFIT PLANS - INFORMATION REL
BENEFIT PLANS - INFORMATION RELATED TO THE CONTRIBUTIONS TO THE COMPANY'S BENEFIT PLANS (Details) - Defined Benefit Plans $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Actual contributions through March 31, 2018 | $ 3.5 |
Expected contributions for the remainder of the year | 12.8 |
Total actual and expected contributions | $ 16.3 |
RESTRUCTURING AND OTHER COSTS -
RESTRUCTURING AND OTHER COSTS - RESTRUCTURING ACCURALS (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 60.1 |
Provisions | 7.6 |
Amounts applied | (11.6) |
Change in estimates | (0.2) |
Ending Balance | 55.9 |
Severance | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 55.9 |
Provisions | 7 |
Amounts applied | (10.8) |
Change in estimates | (0.2) |
Ending Balance | 51.9 |
Severance | 2016 and Prior Plans | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 7.7 |
Provisions | 0.2 |
Amounts applied | (1.5) |
Change in estimates | 0 |
Ending Balance | 6.4 |
Severance | 2017 Plans | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 48.2 |
Provisions | (1.6) |
Amounts applied | (4.2) |
Change in estimates | (0.2) |
Ending Balance | 42.2 |
Severance | 2018 Plans | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0 |
Provisions | 8.4 |
Amounts applied | (5.1) |
Change in estimates | 0 |
Ending Balance | 3.3 |
Lease/Contract Terminations | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0.5 |
Provisions | 0.2 |
Amounts applied | (0.5) |
Ending Balance | 0.2 |
Lease/Contract Terminations | 2016 and Prior Plans | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0.3 |
Provisions | 0.1 |
Amounts applied | (0.4) |
Ending Balance | 0 |
Lease/Contract Terminations | 2017 Plans | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0.2 |
Provisions | 0 |
Amounts applied | 0 |
Ending Balance | 0.2 |
Lease/Contract Terminations | 2018 Plans | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0 |
Provisions | 0.1 |
Amounts applied | (0.1) |
Ending Balance | 0 |
Other Restructuring Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 3.7 |
Provisions | 0.4 |
Amounts applied | (0.3) |
Ending Balance | 3.8 |
Other Restructuring Costs | 2016 and Prior Plans | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 2 |
Provisions | 0 |
Amounts applied | (0.1) |
Ending Balance | 1.9 |
Other Restructuring Costs | 2017 Plans | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 1.7 |
Provisions | 0.3 |
Amounts applied | (0.1) |
Ending Balance | 1.9 |
Other Restructuring Costs | 2018 Plans | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0 |
Provisions | 0.1 |
Amounts applied | (0.1) |
Ending Balance | $ 0 |
RESTRUCTURING AND OTHER COSTS55
RESTRUCTURING AND OTHER COSTS - PROVISIONS AND ADJUSTMENTS AND AMOUNTS APPLIED FOR ALL PLANS BY SEGMENT (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 60.1 |
Provisions | 7.6 |
Amounts applied | (11.6) |
Change in estimates | (0.2) |
Ending Balance | 55.9 |
Operating Segments | Technologies & Equipment | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 13.3 |
Provisions | 2.4 |
Amounts applied | (5.4) |
Change in estimates | 0 |
Ending Balance | 10.3 |
Operating Segments | Consumables | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 46.8 |
Provisions | 0.2 |
Amounts applied | (4) |
Change in estimates | (0.2) |
Ending Balance | 42.8 |
All Other | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0 |
Provisions | 5 |
Amounts applied | (2.2) |
Change in estimates | 0 |
Ending Balance | $ 2.8 |
RESTRUCTURING AND OTHER COSTS56
RESTRUCTURING AND OTHER COSTS - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring, incurred cost | $ 10.2 | $ 3.1 |
Net restructuring costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring, incurred cost | 7.4 | $ 2.3 |
Other Restructuring Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring, incurred cost | $ 2.8 |
FINANCIAL INSTRUMENTS AND DER57
FINANCIAL INSTRUMENTS AND DERIVATIVES - CASH FLOW HEDGES (Details) - Designated as Hedging Instrument $ in Millions | Mar. 31, 2018USD ($) |
Derivative [Line Items] | |
Aggregate Notional Amount | $ 934.6 |
Aggregate Notional Amount Maturing within 12 Months | 315.1 |
Cash Flow Hedging | |
Derivative [Line Items] | |
Aggregate Notional Amount | 467.3 |
Aggregate Notional Amount Maturing within 12 Months | 279.5 |
Cash Flow Hedging | Foreign exchange forward contracts | |
Derivative [Line Items] | |
Aggregate Notional Amount | 349.1 |
Aggregate Notional Amount Maturing within 12 Months | 279.5 |
Cash Flow Hedging | Interest rate swaps | |
Derivative [Line Items] | |
Aggregate Notional Amount | 118.2 |
Aggregate Notional Amount Maturing within 12 Months | $ 0 |
FINANCIAL INSTRUMENTS AND DER58
FINANCIAL INSTRUMENTS AND DERIVATIVES - ADDITIONAL INFORMATION (Details) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2018USD ($) | Mar. 31, 2018JPY (¥) | Jan. 02, 2018EUR (€) | Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | |
Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Aggregate Notional Amount | $ 934.6 | ||||
Not Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Aggregate Notional Amount | 364.4 | ||||
Cross currency basis swaps | Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Unrealized gain (loss) on derivatives before tax | (11.3) | ||||
Foreign exchange forward contracts | Not Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Aggregate Notional Amount | 364.4 | ||||
Cash Flow Hedging | Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Aggregate Notional Amount | 467.3 | ||||
Cash Flow Hedging | Interest rate swaps | Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Aggregate Notional Amount | $ 118.2 | ||||
Net Investment Hedging | Cross currency basis swaps | Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Aggregate Notional Amount | $ 302.6 | ||||
Net Investment Hedging | Interest rate swaps | Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Aggregate Notional Amount | € | € 245,600,000 | ||||
Term Loan Agreement | |||||
Derivative [Line Items] | |||||
Aggregate Notional Amount | ¥ | ¥ 12,600,000,000 | ||||
Term Loan Agreement | Cash Flow Hedging | Interest rate swaps | |||||
Derivative [Line Items] | |||||
Derivative, fixed interest rate | 0.90% | 0.90% | |||
Derivative, contract term (in years) | 5 years | ||||
Fixed Rate Senior Notes | Fixed Rate Senior Notes Due August 2021 | |||||
Derivative [Line Items] | |||||
Long-term debt | $ 295.7 | ||||
Long-term debt, percentage bearing fixed interest | 1.70% | 4.10% |
FINANCIAL INSTRUMENTS AND DER59
FINANCIAL INSTRUMENTS AND DERIVATIVES - GAIN (LOSS) ON AOCI - CASH FLOW HEDGES (Details) - Cash Flow Hedging - Designated as Hedging Instrument - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Gain (Loss) in AOCI | $ (7) | $ (1.7) |
Effective Portion Reclassified from AOCI into Income (Expense) | (2.4) | (0.3) |
Ineffective Portion Recognized in Income (Expense) | (0.1) | (0.3) |
Interest Expense | Interest rate swaps | ||
Derivative [Line Items] | ||
Gain (Loss) in AOCI | 0 | (0.2) |
Effective Portion Reclassified from AOCI into Income (Expense) | (0.6) | (0.8) |
Cost of Products Sold | Foreign exchange forward contracts | ||
Derivative [Line Items] | ||
Gain (Loss) in AOCI | (7) | (1.5) |
Effective Portion Reclassified from AOCI into Income (Expense) | (1.8) | 0.5 |
Other Expense (Income), Net | Foreign exchange forward contracts | ||
Derivative [Line Items] | ||
Ineffective Portion Recognized in Income (Expense) | $ (0.1) | $ (0.3) |
FINANCIAL INSTRUMENTS AND DER60
FINANCIAL INSTRUMENTS AND DERIVATIVES - NET INVESTMENT HEDGES (Details) - Designated as Hedging Instrument € in Millions, $ in Millions | Mar. 31, 2018USD ($) | Mar. 31, 2018EUR (€) | Mar. 31, 2017USD ($) |
Derivative [Line Items] | |||
Aggregate Notional Amount | $ 934.6 | ||
Aggregate Notional Amount Maturing within 12 Months | $ 315.1 | ||
Net Investment Hedging | Cross currency basis swaps | |||
Derivative [Line Items] | |||
Aggregate Notional Amount | $ 302.6 | ||
Aggregate Notional Amount Maturing within 12 Months | $ 0 | ||
Net Investment Hedging | Foreign exchange forward contracts | |||
Derivative [Line Items] | |||
Aggregate Notional Amount | € | € 632 | ||
Aggregate Notional Amount Maturing within 12 Months | € | € 315.1 |
FINANCIAL INSTRUMENTS AND DER61
FINANCIAL INSTRUMENTS AND DERIVATIVES - GAIN (LOSS) ON AOCI - NET INVESTMENT HEDGES (Details) - Net Investment Hedging - Designated as Hedging Instrument - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Gain (Loss) in AOCI | $ (17.9) | $ (1.9) |
Derivative, gain (loss) recognized in income (expense) | (3.4) | 0.5 |
Cross currency basis swaps | ||
Derivative [Line Items] | ||
Gain (Loss) in AOCI | (6.4) | |
Cross currency basis swaps | Interest Income | ||
Derivative [Line Items] | ||
Derivative, gain (loss) recognized in income (expense) | 1.7 | |
Cross currency basis swaps | Other Expense (Income), Net | ||
Derivative [Line Items] | ||
Derivative, gain (loss) recognized in income (expense) | (6.6) | |
Foreign exchange forward contracts | ||
Derivative [Line Items] | ||
Gain (Loss) in AOCI | (11.5) | (1.9) |
Foreign exchange forward contracts | Other Expense (Income), Net | ||
Derivative [Line Items] | ||
Derivative, gain (loss) recognized in income (expense) | $ 1.5 | $ 0.5 |
FINANCIAL INSTRUMENTS AND DER62
FINANCIAL INSTRUMENTS AND DERIVATIVES - HEDGES NOT DESIGNATED (Details) - Not Designated as Hedging Instrument - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Aggregate Notional Amount | $ 364.4 | |
Aggregate Notional Amount Maturing within 12 Months | 364.4 | |
Derivative, gain (loss) recognized in income (expense) | 0.7 | $ (2.8) |
Foreign exchange forward contracts | ||
Derivative [Line Items] | ||
Aggregate Notional Amount | 364.4 | |
Aggregate Notional Amount Maturing within 12 Months | 364.4 | |
Foreign exchange forward contracts | Other Expense (Income), Net | ||
Derivative [Line Items] | ||
Derivative, gain (loss) recognized in income (expense) | $ 0.7 | $ (2.8) |
FINANCIAL INSTRUMENTS AND DER63
FINANCIAL INSTRUMENTS AND DERIVATIVES - BALANCE SHEET LOCATION (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Derivative asset, fair value, gross | $ 2.7 | $ 4.8 |
Derivative liability, fair value, gross | 45.9 | 22 |
Prepaid Expenses and Other Current Assets, Net | ||
Derivative [Line Items] | ||
Derivative asset, fair value, gross | 0.9 | 1.4 |
Not designated derivative assets, fair value | 1.6 | 3.4 |
Other Noncurrent Assets, Net | ||
Derivative [Line Items] | ||
Derivative asset, fair value, gross | 0.2 | 0 |
Not designated derivative assets, fair value | 0 | 0 |
Accrued Liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value, gross | 19.9 | 13.7 |
Not designated derivative liabilities, fair value | 5.2 | 3.7 |
Other Noncurrent Liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value, gross | 20.8 | 4.6 |
Not designated derivative liabilities, fair value | 0 | 0 |
Foreign exchange forward contracts | Prepaid Expenses and Other Current Assets, Net | ||
Derivative [Line Items] | ||
Derivative asset, fair value, gross | 0.9 | 1.4 |
Not designated derivative assets, fair value | 1.6 | 3.4 |
Foreign exchange forward contracts | Other Noncurrent Assets, Net | ||
Derivative [Line Items] | ||
Derivative asset, fair value, gross | 0.2 | 0 |
Not designated derivative assets, fair value | 0 | 0 |
Foreign exchange forward contracts | Accrued Liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value, gross | 19.6 | 13.4 |
Not designated derivative liabilities, fair value | 5.2 | 3.7 |
Foreign exchange forward contracts | Other Noncurrent Liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value, gross | 7.8 | 4.5 |
Not designated derivative liabilities, fair value | 0 | 0 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative liability, fair value, gross | 0.4 | 0.4 |
Interest rate swaps | Prepaid Expenses and Other Current Assets, Net | ||
Derivative [Line Items] | ||
Derivative asset, fair value, gross | 0 | 0 |
Interest rate swaps | Other Noncurrent Assets, Net | ||
Derivative [Line Items] | ||
Derivative asset, fair value, gross | 0 | 0 |
Interest rate swaps | Accrued Liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value, gross | 0.3 | 0.3 |
Interest rate swaps | Other Noncurrent Liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value, gross | 0.1 | $ 0.1 |
Cross currency basis swaps | ||
Derivative [Line Items] | ||
Derivative liability, fair value, gross | 12.9 | |
Cross currency basis swaps | Prepaid Expenses and Other Current Assets, Net | ||
Derivative [Line Items] | ||
Derivative asset, fair value, gross | 0 | |
Cross currency basis swaps | Other Noncurrent Assets, Net | ||
Derivative [Line Items] | ||
Derivative asset, fair value, gross | 0 | |
Cross currency basis swaps | Accrued Liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value, gross | 0 | |
Cross currency basis swaps | Other Noncurrent Liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value, gross | $ 12.9 |
FINANCIAL INSTRUMENTS AND DER64
FINANCIAL INSTRUMENTS AND DERIVATIVES - BALANCE SHEET OFFSETTING (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative Asset [Abstract] | ||
Gross Amounts Recognized | $ 2.7 | $ 4.8 |
Gross Amount Offset on the Consolidated Balance Sheets | 0 | 0 |
Net Amounts Presented on the Consolidated Balance Sheets | 2.7 | 4.8 |
Gross amounts not offset on the balance sheets, financial instruments | (2.6) | (3.9) |
Gross amounts not offset on the balance sheets, cash collateral received/pledged | 0 | 0 |
Net Amount | 0.1 | 0.9 |
Derivative Liability [Abstract] | ||
Gross Amounts Recognized | 45.9 | 22 |
Gross Amount Offset on the Consolidated Balance Sheets | 0 | 0 |
Net Amounts Presented on the Consolidated Balance Sheets | 45.9 | 22 |
Gross amounts not offset on the balance sheets, financial instruments | (2.6) | (3.9) |
Gross amounts not offset on the balance sheets, cash collateral received/pledged | 0 | 0 |
Net Amount | 43.3 | 18.1 |
Foreign exchange forward contracts | ||
Derivative Asset [Abstract] | ||
Gross Amounts Recognized | 2.7 | 4.8 |
Gross Amount Offset on the Consolidated Balance Sheets | 0 | 0 |
Net Amounts Presented on the Consolidated Balance Sheets | 2.7 | 4.8 |
Gross amounts not offset on the balance sheets, financial instruments | (2.6) | (3.9) |
Gross amounts not offset on the balance sheets, cash collateral received/pledged | 0 | 0 |
Net Amount | 0.1 | 0.9 |
Derivative Liability [Abstract] | ||
Gross Amounts Recognized | 32.6 | 21.6 |
Gross Amount Offset on the Consolidated Balance Sheets | 0 | 0 |
Net Amounts Presented on the Consolidated Balance Sheets | 32.6 | 21.6 |
Gross amounts not offset on the balance sheets, financial instruments | (1.5) | (3.8) |
Gross amounts not offset on the balance sheets, cash collateral received/pledged | 0 | 0 |
Net Amount | 31.1 | 17.8 |
Interest rate swaps | ||
Derivative Liability [Abstract] | ||
Gross Amounts Recognized | 0.4 | 0.4 |
Gross Amount Offset on the Consolidated Balance Sheets | 0 | 0 |
Net Amounts Presented on the Consolidated Balance Sheets | 0.4 | 0.4 |
Gross amounts not offset on the balance sheets, financial instruments | (0.1) | (0.1) |
Gross amounts not offset on the balance sheets, cash collateral received/pledged | 0 | 0 |
Net Amount | 0.3 | $ 0.3 |
Cross currency basis swaps | ||
Derivative Liability [Abstract] | ||
Gross Amounts Recognized | 12.9 | |
Gross Amount Offset on the Consolidated Balance Sheets | 0 | |
Net Amounts Presented on the Consolidated Balance Sheets | 12.9 | |
Gross amounts not offset on the balance sheets, financial instruments | (1) | |
Gross amounts not offset on the balance sheets, cash collateral received/pledged | 0 | |
Net Amount | $ 11.9 |
FAIR VALUE MEASUREMENT - ADDITI
FAIR VALUE MEASUREMENT - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 1,661 | $ 1,629.9 |
Carrying (Reported) Amount, Fair Value Disclosure | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 1,654.6 | $ 1,620.8 |
FAIR VALUE MEASUREMENT - FINANC
FAIR VALUE MEASUREMENT - FINANCIAL ASSETS AND LIABILITIES THAT ARE RECORDED AT FAIR VALUE AND CLASSIFIED BASED ON THE LOWEST LEVEL OF INPUT (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | $ 2.7 | $ 59.2 |
Liabilities | 55 | 30.6 |
Foreign exchange forward contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 2.7 | 4.8 |
Liabilities | 32.6 | 21.6 |
Interest rate swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 0.4 | 0.4 |
Cross Currency Interest Rate Swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 12.9 | |
Contingent considerations on acquisitions | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 9.1 | 8.6 |
Available-for-sale security | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 54.4 | |
Fair Value, Inputs, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 | Foreign exchange forward contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 | Interest rate swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 | Cross Currency Interest Rate Swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 0 | |
Fair Value, Inputs, Level 1 | Contingent considerations on acquisitions | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 0 | 0 |
Fair Value, Inputs, Level 1 | Available-for-sale security | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 0 | |
Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 2.7 | 59.2 |
Liabilities | 45.9 | 22 |
Fair Value, Inputs, Level 2 | Foreign exchange forward contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 2.7 | 4.8 |
Liabilities | 32.6 | 21.6 |
Fair Value, Inputs, Level 2 | Interest rate swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 0.4 | 0.4 |
Fair Value, Inputs, Level 2 | Cross Currency Interest Rate Swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 12.9 | |
Fair Value, Inputs, Level 2 | Contingent considerations on acquisitions | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 | Available-for-sale security | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 54.4 | |
Fair Value, Inputs, Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 9.1 | 8.6 |
Fair Value, Inputs, Level 3 | Foreign exchange forward contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 | Interest rate swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 | Cross Currency Interest Rate Swaps | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 0 | |
Fair Value, Inputs, Level 3 | Contingent considerations on acquisitions | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | $ 9.1 | 8.6 |
Fair Value, Inputs, Level 3 | Available-for-sale security | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets | $ 0 |
FAIR VALUE MEASUREMENT - LEVEL
FAIR VALUE MEASUREMENT - LEVEL 3 LIABILITIES WITH UNOBSERVABLE INPUTS (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 31, 2017 | $ 8.6 |
Fair value adjustment: | |
Reported in Other expense (income), net | 0.2 |
Effect of exchange rate changes | 0.3 |
Balance at March 31, 2018 | $ 9.1 |
INCOME TAXES - ADDITIONAL INFOR
INCOME TAXES - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Excess tax benefit recorded during period | $ 2.2 | $ 6.3 |
Tax expense from release of valuation allowance | 1.2 | |
Tax expense related to enacted statutory rate changes | 0.2 | 12.2 |
Tax benefit for other discrete tax matters | (7.2) | $ 1.4 |
Tax expense related to U.S. tax reform | 3.4 | |
Tax expense related to gain on sale of marketable securities | 1.1 | |
Tax expense related to transition tax for accumulated foreign earnings, provisional liability | $ 1 |
GOODWILL AND INTANGIBLE ASSET69
GOODWILL AND INTANGIBLE ASSETS - RECONCILIATION OF CHANGES IN GOODWILL (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | |||
Balance, beginning of the year | $ 4,539.2 | ||
Acquisition related additions | 3.7 | ||
Measurement period adjustments on prior acquisitions | 0.5 | ||
Effects of exchange rate changes | 29.8 | ||
Balance, end of the year | 4,573.2 | ||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Net Carrying Amount | 4,539.2 | $ 4,573.2 | $ 4,539.2 |
Technologies & Equipment | |||
Goodwill [Roll Forward] | |||
Balance, beginning of the year | 3,660.6 | ||
Acquisition related additions | 0 | ||
Measurement period adjustments on prior acquisitions | 0 | ||
Effects of exchange rate changes | 23.5 | ||
Balance, end of the year | 3,684.1 | ||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Gross Carrying Amount | 5,335 | 5,311.5 | |
Cumulative Impairment | (1,650.9) | (1,650.9) | |
Net Carrying Amount | 3,660.6 | 3,684.1 | 3,660.6 |
Consumables | |||
Goodwill [Roll Forward] | |||
Balance, beginning of the year | 878.6 | ||
Acquisition related additions | 3.7 | ||
Measurement period adjustments on prior acquisitions | 0.5 | ||
Effects of exchange rate changes | 6.3 | ||
Balance, end of the year | 889.1 | ||
Goodwill, Impaired, Accumulated Impairment Loss [Abstract] | |||
Net Carrying Amount | $ 878.6 | $ 889.1 | $ 878.6 |
GOODWILL AND INTANGIBLE ASSET70
GOODWILL AND INTANGIBLE ASSETS - IDENTIFIABLE DEFINITE-LIVED AND INDEFINITE-LIVED INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,658.3 | $ 2,602.2 |
Accumulated Amortization | (707.6) | (648.3) |
Net Carrying Amount | 1,950.7 | 1,953.9 |
Identifiable intangible assets, gross | 3,519 | 3,449 |
Identifiable intangible assets, net | 2,811.4 | 2,800.7 |
Trade names and trademarks | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, gross carrying amount | 860.7 | 846.8 |
Patents and developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,420.3 | 1,385.5 |
Accumulated Amortization | (338.9) | (305) |
Net Carrying Amount | 1,081.4 | 1,080.5 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 76.4 | 76.4 |
Accumulated Amortization | (47.9) | (46.5) |
Net Carrying Amount | 28.5 | 29.9 |
Licensing agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 34.5 | 31.2 |
Accumulated Amortization | (25.2) | (24.8) |
Net Carrying Amount | 9.3 | 6.4 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,127.1 | 1,109.1 |
Accumulated Amortization | (295.6) | (272) |
Net Carrying Amount | $ 831.5 | $ 837.1 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Nov. 08, 2017USD ($) |
Arbitration With Roth Licensing | |
Loss Contingencies [Line Items] | |
Litigation settlement amount | $ 16 |