SEGMENT AND GEOGRAPHIC INFORMATION

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company has numerous operating businesses covering a wide range of dental and certain healthcare products and geographic regions, primarily serving the professional dental market. Professional dental products represented approximately 88% and 89% of sales for the three months ended March 31, 2014 and 2013, respectively.

The operating businesses are combined into operating groups, which generally have overlapping product offerings, geographical presence, customer bases, distribution channels, and regulatory oversight. These operating groups are considered the Company’s reportable segments as the Company’s chief operating decision-maker regularly reviews financial results at the operating group level and uses this information to manage the Company’s operations. The accounting policies of the segments are consistent with those described in the Company’s most recently filed Form 10-K in the summary of significant accounting policies. The Company’s segments are measured on net third party sales, excluding precious metal content and segment income for reporting purposes. Net sales excluding precious metal content are the Company’s net sales excluding the precious metal cost within the products sold, and are considered a non-US GAAP measure. The Company’s exclusion of precious metal content in the measurement of net third party sales enhances comparability of performance between periods as it excludes the fluctuating market prices of the precious metal content. The Company defines segment income for reporting purposes as net operating income before restructuring and other costs, interest expense, interest income, other expense (income), net and provision for income taxes. Generally, the Company evaluates performance of the segments based on the groups’ segment income and net third party sales, excluding precious metal content. A description of the products and services provided within each of the Company’s three reportable segments is provided below.

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

During the three months ended March 31, 2014, the Company realigned reporting responsibilities for multiple locations as a result of changes to the management structure. The segment information below reflects the revised structure for all periods shown.

Dental Consumable Businesses

This segment includes responsibility for the design, manufacturing, sales and distribution of certain small equipment and chairside consumable products in the United States, Germany and certain other European regions.  It also has responsibility for the sales and distribution of certain endodontic products in Germany and certain other European regions as well as chairside consumable, endodontic and dental laboratory products in Australia.

Dental Specialty and Laboratory Businesses

This segment includes responsibility for the design, manufacture, sales and distribution of most of the Company’s dental specialty products, including endodontic, orthodontic and implant products, in most regions of the world. In addition, this segment is responsible for the design, manufacture, sales and distribution of most of the Company’s dental laboratory products. This segment is also responsible for the sales and distribution of most of the Company’s other dental products within certain European regions as well as Japan, Canada and Mexico, and the design, manufacture, worldwide distribution and sales of certain non-dental products, excluding urological and surgery-related products.

Healthcare and Emerging Markets Businesses

This segment is responsible for the worldwide design, manufacturing, sales and distribution of the Company’s healthcare products, primarily urological and surgery-related products, throughout most of the world. This segment also includes the responsibility for the sales and distribution of most of the Company’s dental products sold in Eastern Europe, Middle East, South America, Latin America, Asia (excluding Japan) and Africa.

The following tables set forth information about the Company’s segments for the three months ended March 31, 2014 and 2013:

Third Party Net Sales

	Three Months Ended
(in thousands)	2014			2013
Dental Consumable Businesses	$	173,976		$	163,707
Dental Specialty and Laboratory Businesses	432,407			447,977
Healthcare and Emerging Markets Businesses	124,946			121,739
All Other (a)	(1,215		)	(1,339		)
Total net sales	$	730,114		$	732,084

(a) Includes amounts recorded at Corporate headquarters.

Third Party Net Sales, Excluding Precious Metal Content

	Three Months Ended
(in thousands)	2014			2013
Dental Consumable Businesses	$	173,914		$	163,609
Dental Specialty and Laboratory Businesses	391,681			388,916
Healthcare and Emerging Markets Businesses	124,802			121,463
All Other (b)	(1,215		)	(1,339		)
Total net sales, excluding precious metal content	689,182			672,649
Precious metal content of sales	40,932			59,435
Total net sales, including precious metal content	$	730,114		$	732,084

(b) Includes amounts recorded at Corporate headquarters.

Inter-segment Net Sales

	Three Months Ended
(in thousands)	2014			2013
Dental Consumable Businesses	$	28,601		$	30,230
Dental Specialty and Laboratory Businesses	50,231			42,965
Healthcare and Emerging Markets Businesses	3,306			3,114
All Other (c)	60,785			57,427
Eliminations	(142,923		)	(133,736		)
Total	$	—		$	—

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

Segment Operating Income (Loss)

	Three Months Ended
(in thousands)	2014			2013
Dental Consumable Businesses	$	58,509		$	54,315
Dental Specialty and Laboratory Businesses	73,913			69,678
Healthcare and Emerging Markets Businesses	4,724			1,466
All Other (d)	(30,783		)	(30,936		)
Segment operating income	106,363			94,523
Reconciling Items:
Restructuring and other costs	793			665
Interest expense	10,955			15,221
Interest income	(1,435		)	(2,175		)
Other expense (income), net	388			2,918
Income before income taxes	$	95,662		$	77,894

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

Assets

(in thousands)	March 31, 2014		December 31, 2013
Dental Consumable Businesses	$	699,477	$	699,386
Dental Specialty and Laboratory Businesses	3,380,841		3,404,604
Healthcare and Emerging Markets Businesses	932,147		869,907
All Other (e)	76,968		104,150
Total	$	5,089,433	$	5,078,047

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