UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-16211

DENTSPLY SIRONA Inc.

(Exact name of registrant as specified in its charter)

Delaware	39-1434669
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
13320 Ballantyne Corporate Place, Charlotte, North Carolina	28277-3607
(Address of principal executive offices)	(Zip Code)

(844) 848-0137

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.01 per share	XRAY	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  x  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x	Accelerated filer  ☐
Non-accelerated filer  ☐	Smaller reporting company  ☐
	Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   

Yes   ☐ No   x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: At July 27, 2023, DENTSPLY SIRONA Inc. had 211,716,006 shares of common stock outstanding.

DENTSPLY SIRONA Inc.

TABLE OF CONTENTS

 

PART I	FINANCIAL INFORMATION	Page
Item 1	Financial Statements (unaudited)	4
	Consolidated Statements of Operations	4
	Consolidated Statements of Comprehensive Income (Loss)	5
	Consolidated Balance Sheets	6
	Consolidated Statements of Changes in Equity	7
	Consolidated Statements of Cash Flows	9
	Notes to Unaudited Interim Consolidated Financial Statements	10
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3	Quantitative and Qualitative Disclosures About Market Risk	58
Item 4	Controls and Procedures	58
PART II	OTHER INFORMATION
Item 1	Legal Proceedings	62
Item 1A	Risk Factors	62
Item 2	Unregistered Sales of Securities and Use of Proceeds	63
Item 6	Exhibits	64
Signatures		65

2

General

Unless otherwise stated herein or the context otherwise indicates, reference throughout this Form 10-Q to “Dentsply Sirona,” or the “Company,” “we,” “us” or “our” refers to financial information and transactions of DENTSPLY SIRONA Inc., together with its subsidiaries on a consolidated basis.

Forward-Looking Statements and Associated Risks

All statements in this Form 10-Q that do not directly and exclusively relate to historical facts constitute “forward-looking statements” and include statements related to our ability to successfully remediate the material weaknesses in our internal control over financial reporting disclosed in this Form 10-Q in the manner currently anticipated. These statements represent current expectations and beliefs, and no assurance can be given that the results described in such statements will be achieved. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of our control, including those described in Part I, Item 1A, “Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the "2022 Form 10-K"), and other factors which may be described in the Company’s other filings with the Securities and Exchange Commission (the “SEC”). No assurance can be given that any expectation, belief, goal or plan set forth in any forward-looking statement can or will be achieved, and readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.

Investors should understand it is not possible to predict or identify all such factors or risks. As such, you should not consider the risks identified in the Company’s SEC filings to be a complete discussion of all potential risks or uncertainties associated with an investment in the Company.

Disclosure Regarding Trademarks

This report includes trademarks, tradenames and service marks that are our property or the property of other third parties. Solely for convenience, such trademarks and tradenames sometimes appear without any “™” or “®” symbol. Failure to include such symbols is not intended to suggest, in any way, that we will not assert our rights or the rights of any applicable licensor, to these trademarks and tradenames.

3

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

DENTSPLY SIRONA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net sales	$	1,028	$	1,023	$	2,006	$	1,992
Cost of products sold	478		442		937		890
Gross profit	550		581		1,069		1,102
Selling, general, and administrative expenses	416		410		832		786
Research and development expenses	49		45		95		90
Restructuring and other costs	5		7		64		10
Operating income	80		119		78		216
Other income and expenses:
Interest expense, net	21		15		40		27
Other expense (income), net	13		13		20		11
Income before income taxes	46		91		18		178
(Benefit) provision for income taxes	(39)		18		(44)		36
Net income	85		73		62		142
Less: Net loss attributable to noncontrolling interest	(1)		—		(5)		—
Net income attributable to Dentsply Sirona	$	86	$	73	$	67	$	142
Net income per common share attributable to Dentsply Sirona:
Basic	$	0.41	$	0.34	$	0.31	$	0.66
Diluted	$	0.40	$	0.34	$	0.31	$	0.66
Weighted average common shares outstanding:
Basic	211.9		214.9		213.2		215.9
Diluted	213.1		215.3		214.4		216.5

See accompanying Notes to Unaudited Interim Consolidated Financial Statements.

4

DENTSPLY SIRONA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	85	$	73	$	62	$	142
Other comprehensive (loss) income, net of tax:
Foreign currency translation (loss) gain	—		(114)		15		(162)
Net (loss) gain on derivative financial instruments	(6)		22		(7)		32
Pension liability gain	—		2		—		3
Total other comprehensive (loss) income, net of tax	(6)		(90)		8		(127)
Total comprehensive income (loss)	79		(17)		70		15
Less: Comprehensive loss attributable to noncontrolling interests	(1)		—		(5)		—
Total comprehensive income (loss) attributable to Dentsply Sirona	$	80	$	(17)	$	75	$	15

See accompanying Notes to Unaudited Interim Consolidated Financial Statements.

5

DENTSPLY SIRONA INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share amounts)

(unaudited)

	June 30, 2023		December 31, 2022
Assets
Current Assets:
Cash and cash equivalents	$	295	$	365
Accounts and notes receivables-trade, net	670		632
Inventories, net	657		627
Prepaid expenses and other current assets	298		269
Total Current Assets	1,920		1,893
Property, plant, and equipment, net	772		761
Operating lease right-of-use assets, net	191		200
Identifiable intangible assets, net	1,808		1,903
Goodwill	2,703		2,688
Other noncurrent assets	256		198
Total Assets	$	7,650	$	7,643
Liabilities and Equity
Current Liabilities:
Accounts payable	$	265	$	279
Accrued liabilities	728		727
Income taxes payable	17		46
Notes payable and current portion of long-term debt	261		118
Total Current Liabilities	1,271		1,170
Long-term debt	1,841		1,826
Operating lease liabilities	144		149
Deferred income taxes	261		287
Other noncurrent liabilities	431		399
Total Liabilities	3,948		3,831
Commitments and contingencies (Note 14)
Equity:
Preferred stock, $1.00 par value; 0.25 million shares authorized; no shares issued	—		—
Common stock, $0.01 par value;	3		3
400.0 million shares authorized, and 264.5 million shares issued at June 30, 2023 and December 31, 2022
211.7 million and 215.3 million shares outstanding at June 30, 2023 and December 31, 2022
Capital in excess of par value	6,648		6,629
Retained earnings	463		456
Accumulated other comprehensive loss	(620)		(628)
Treasury stock, at cost, 52.8 million and 49.3 million shares at June 30, 2023 and December 31, 2022, respectively	(2,788)		(2,649)
Total Dentsply Sirona Equity	3,706		3,811
Noncontrolling interests	(4)		1
Total Equity	3,702		3,812
Total Liabilities and Equity	$	7,650	$	7,643

See accompanying Notes to Unaudited Interim Consolidated Financial Statements.

6

DENTSPLY SIRONA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in millions, except per share amounts)

(unaudited)

	Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Dentsply Sirona Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2022	$	3	$	6,629	$	456	$	(628)	$	(2,649)	$	3,811	$	1	$	3,812
Net loss	—		—		(19)		—		—		(19)		(4)		(23)
Other comprehensive income	—		—		—		14		—		14		—		14
Stock based compensation expense	—		17		—		—		—		17		—		17
Funding of employee stock purchase plan	—		—		—		—		3		3		—		3
Accelerated share repurchase	—		(30)		—		—		(121)		(151)		—		(151)
Restricted stock unit distributions	—		(12)		—		—		8		(4)		—		(4)
Cash dividends declared ($0.14 per share)	—		—		(30)		—		—		(30)		—		(30)
Balance at March 31, 2023	$	3	$	6,604	$	407	$	(614)	$	(2,759)	$	3,641	$	(3)	$	3,638
Net income (loss)	—		—		86		—		—		86		(1)		85
Other comprehensive loss	—		—		—		(6)		—		(6)		—		(6)
Exercise of stock options	—		—		—		—		1		1		—		1
Stock based compensation expense	—		14		—		—		—		14		—		14
Accelerated share repurchase	—		30		—		—		(30)		—		—		—
Restricted stock unit dividends	—		—		(1)		—				(1)		—		(1)
Cash dividends declared ($0.14 per share)	—		—		(29)		—		—		(29)		—		(29)
Balance at June 30, 2023	$	3	$	6,648	$	463	$	(620)	$	(2,788)	$	3,706	$	(4)	$	3,702

7

	Common Stock		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Dentsply Sirona Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2021	$	3	$	6,606	$	1,514	$	(592)	$	(2,535)	$	4,996	$	1	$	4,997
Net income	—		—		69		—		—		69		—		69
Other comprehensive loss	—		—		—		(37)		—		(37)		—		(37)
Exercise of stock options	—		1		—		—		4		5		—		5
Stock based compensation expense	—		11		—		—		—		11		—		11
Funding of employee stock purchase plan	—		1		—		—		1		2		—		2
Accelerated share repurchase	—		(30)		—		—		(120)		(150)		—		(150)
Restricted stock unit distributions	—		(16)		—		—		10		(6)		—		(6)
Cash dividends declared ($0.125 per share)	—		—		(27)		—		—		(27)		—		(27)
Balance at March 31, 2022	$	3	$	6,573	$	1,556	$	(629)	$	(2,640)	$	4,863	$	1	$	4,864
Net income	—		—		73		—		—		73		—		73
Other comprehensive loss	—		—		—		(90)		—		(90)		—		(90)
Exercise of stock options	—		—		—		—		2		2		—		2
Stock based compensation expense	—		16		—		—		—		16		—		16
Accelerated share repurchase	—		30		—		—		(30)		—		—		—
Restricted stock unit distributions	—		(3)		—		—		1		(2)		—		(2)
Cash dividends declared ($0.125 per share)	—		—		(26)		—		—		(26)		—		(26)
Balance at June 30, 2022	$	3	$	6,617	$	1,602	$	(719)	$	(2,666)	$	4,837	$	1	$	4,838

See accompanying Notes to Unaudited Interim Consolidated Financial Statements.

8

DENTSPLY SIRONA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	62	$	142
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	64		59
Amortization of intangible assets	106		108
Deferred income taxes	(83)		(13)
Stock based compensation expense	31		33
Restructuring and other costs	42		(3)
Other non-cash expense	36		29
Changes in operating assets and liabilities, net of acquisitions:
Accounts and notes receivable-trade, net	(38)		53
Inventories, net	(32)		(95)
Prepaid expenses and other current assets	(40)		(39)
Other noncurrent assets	(1)		(6)
Accounts payable	(15)		49
Accrued liabilities	(44)		(44)
Income taxes	(34)		2
Other noncurrent liabilities	29		(9)
Net cash provided by operating activities	83		266
Cash flows from investing activities:
Capital expenditures	(72)		(85)
Cash received on derivative contracts	4		5
Other investing activities	1		(3)
Net cash used in investing activities	(67)		(83)
Cash flows from financing activities:
Cash paid for treasury stock	(150)		(150)
Proceeds on short-term borrowings	143		38
Cash dividends paid	(57)		(51)
Proceeds from long-term borrowings, net of deferred financing costs	—		5
Repayments on long-term borrowings	(1)		(2)
Proceeds from exercised stock options	—		6
Other financing activities, net	(5)		(8)
Net cash used in financing activities	(70)		(162)
Effect of exchange rate changes on cash and cash equivalents	(16)		2
Net (decrease) increase in cash and cash equivalents	(70)		23
Cash and cash equivalents at beginning of period	365		339
Cash and cash equivalents at end of period	$	295	$	362

See accompanying Notes to Unaudited Interim Consolidated Financial Statements.

9

DENTSPLY SIRONA Inc. and Subsidiaries

NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BUSINESS AND BASIS OF PRESENTATION

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included. Results for interim periods should not be considered indicative of results for a full year. These financial statements and related notes contain the accounts of DENTSPLY SIRONA Inc. and subsidiaries (“Dentsply Sirona” or the “Company”) on a consolidated basis and should be read in conjunction with the consolidated financial statements and notes included in the Company’s most recent Form 10-K/A for the year ended December 31, 2022, filed with the Securities and Exchange Commission on August 7, 2023 (the "2022 Form 10-K/A").

Effective April 1, 2023 the Company realigned its reporting structure due to certain organizational changes. As a result, the Company's reportable segments changed from Technology & Equipment and Consumables to (i) Connected Technology Solutions, (ii) Essential Dental Solutions, (iii) Orthodontic and Implant Solutions, and (iv) Wellspect Healthcare. All prior segment information and disaggregated revenue information have been recast to reflect the Company's new segment structure and current period presentation. Refer to Note 6, Segment Information, for further discussion on this change.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of Net sales and expense during the reporting period. Actual results could differ materially from those estimates.

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board ("FASB") issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. The new standard requirement to measure contract assets and contract liabilities acquired in a business combination at fair value differs from the current approach. The amendments in this update were effective for the fiscal years and interim periods ending after December 31, 2022. The Company adopted this accounting standard on January 1, 2023. The adoption of this standard did not materially impact the Company's consolidated financial statements or related disclosures.

In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which was subsequently amended by ASU No. 2021-01 “Reference Rate Reform (Topic 848): Scope” in January 2021 and by ASU No. 2022-06 “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848” in December 2022. The new standard provides optional expedients and exceptions to contracts, hedging relationships, and other transactions that reference the London Interbank Offer Rate ("LIBOR") or another rate expected to be discontinued due to the reference rate reform. This standard was effective upon issuance. The adoption of this standard did not materially impact the Company's consolidated financial statements or related disclosures.

10

Seasonality

Our business is subject to quarterly fluctuations in demand due to price changes, marketing and promotional programs, management of inventory levels by distributors and other customers, and implementation of strategic initiatives which may impact sales levels in any given period. Demand can also fluctuate based on the timing of dental tradeshows, new product introductions, and variability in dental patient traffic, which can be exacerbated by seasonal or severe weather patterns, other demographic disruptions, or macroeconomic conditions. Some dental practices in certain countries may also delay purchasing equipment and restocking consumables until year-end due to tax or other financial planning reasons which can impact the timing of our consolidated net sales, net income and cash flows. Sales for the industry and the Company are generally strongest in the second and fourth quarters and weaker in the first and third quarters, due to the effects of the items noted above and due to the impact of holidays and vacations, particularly throughout Europe. Because of the seasonal nature of our business, the results of operations for any fiscal quarter will not necessarily be indicative of results to be expected for other quarters or a full fiscal year.

11

NOTE 2 - REVENUE

Revenues are derived primarily from the sale of dental equipment and dental and healthcare consumable products. Revenues are measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.

Net sales disaggregated by product category for the three and six months ended June 30, 2023 and 2022 were as follows:

	Three Months Ended				Six Months Ended
(in millions)	2023		2022		2023		2022
Equipment & Instruments	$	180	$	169	$	332	$	335
CAD/CAM	129		138		242		254
Connected Technology Solutions	$	309	$	307	$	574	$	589
Essential Dental Solutions	$	377	$	380	$	763	$	736
Orthodontics	$	86	$	76	$	172	$	144
Implants & Prosthetics	184		188		357		381
Orthodontic and Implant Solutions	$	270	$	264	$	529	$	525
Wellspect Healthcare	$	72	$	72	$	140	$	142
Total net sales	$	1,028	$	1,023	$	2,006	$	1,992

Net sales disaggregated by geographic region for the three and six months ended June 30, 2023 and 2022 were as follows:

	Three Months Ended				Six Months Ended
(in millions)	2023		2022		2023		2022
United States	$	362	$	358	$	713	$	666
Europe	403		414		799		825
Rest of World	263		251		494		501
Total net sales	$	1,028	$	1,023	$	2,006	$	1,992

Contract Assets and Liabilities

The Company does not typically have contract assets in the normal course of its business. Contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advanced billings for customer aligner treatment where the performance obligation has not yet been fulfilled. The Company had deferred revenue of $111 million and $35 million recorded in Accrued liabilities and Other noncurrent liabilities, respectively, in the Consolidated Balance Sheets at June 30, 2023. The Company had deferred revenue of $91 million and $27 million recorded in Accrued liabilities and Other noncurrent liabilities, respectively, in the Consolidated Balance Sheets at December 31, 2022. The amount of deferred revenue as of December 31, 2022 which was disclosed in the Form 10-Q for the three months ended March 31, 2023 has been revised by $34 million to correct for an error in the amount previously disclosed. Although the Company determined that this error impacts the footnote disclosure only and does not materially impact the previously issued consolidated financial statements, this revision was made to provide comparability with current period disclosures. The Company recognized approximately $47 million of revenue during the current year which was previously deferred as of December 31, 2022. The Company expects to recognize a majority of the remaining deferred revenue within the next twelve months.

12

Allowance for Doubtful Accounts

Accounts and notes receivables-trade, net are stated net of allowances for doubtful accounts and trade discounts, which were $11 million at June 30, 2023 and $14 million at December 31, 2022. For the three and six months ended June 30, 2023 and 2022, changes to the provision for doubtful accounts including write-offs of accounts receivable that were previously reserved were insignificant. Changes to this provision are included in Selling, general, and administrative expenses in the Consolidated Statements of Operations.

NOTE 3 – STOCK COMPENSATION

The amounts of stock compensation expense recorded in the Company's Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022 were as follows:

	Three Months Ended				Six Months Ended
(in millions)	2023		2022		2023		2022
Cost of products sold	$	1	$	—	$	2	$	1
Selling, general, and administrative expense	11		22		24		31
Research and development expense	1		—		2		1
Restructuring and other costs	1		—		3		—
Total stock based compensation expense	$	14	$	22	$	31	$	33
Related deferred income tax benefit	$	1	$	2	$	3	$	3

13

NOTE 4 – COMPREHENSIVE INCOME (LOSS)

Changes in Accumulated other comprehensive income (loss) ("AOCI"), net of tax, by component for the six months ended June 30, 2023 and 2022 were as follows:

(in millions)	Foreign Currency Translation Gain (Loss)		Gain (Loss) on Cash Flow Hedges		Gain (Loss) on Net Investment and Fair Value Hedges		Pension Liability Gain (Loss)		Total
Balance, net of tax, at December 31, 2022	$	(522)	$	(17)	$	(73)	$	(16)	$	(628)
Other comprehensive income (loss) before reclassifications and tax impact	6		(1)		—		—		5
Tax benefit	9		—		—		—		9
Other comprehensive income (loss), net of tax, before reclassifications	15		(1)		—		—		14
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	—		—		—		—		—
Net increase (decrease) in other comprehensive income	15		(1)		—		—		14
Balance, net of tax, at March 31, 2023	$	(507)	$	(18)	$	(73)	$	(16)	$	(614)
Other comprehensive loss before reclassifications and tax impact	(3)		—		(11)		—		(14)
Tax benefit	3		—		3		—		6
Other comprehensive loss, net of tax, before reclassifications	—		—		(8)		—		(8)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	—		2		—		—		2
Net (decrease) increase in other comprehensive income	—		2		(8)		—		(6)
Balance, net of tax, at June 30, 2023	$	(507)	$	(16)	$	(81)	$	(16)	$	(620)

14

(in millions)	Foreign Currency Translation Gain (Loss)		Gain (Loss) on Cash Flow Hedges		Gain (Loss) on Net Investment and Fair Value Hedges		Pension Liability Gain (Loss)		Total
Balance, net of tax, at December 31, 2021	$	(366)	$	(16)	$	(103)	$	(107)	$	(592)
Other comprehensive (loss) income before reclassifications and tax impact	(37)		3		9		—		(25)
Tax expense	(11)		—		(1)		—		(12)
Other comprehensive (loss) income, net of tax, before reclassifications	(48)		3		8		—		(37)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	—		(1)		—		1		—
Net (decrease) increase in other comprehensive income	(48)		2		8		1		(37)
Balance, net of tax, at March 31, 2022	$	(414)	$	(14)	$	(95)	$	(106)	$	(629)
Other comprehensive (loss) income before reclassifications and tax impact	(86)		(3)		32		—		(57)
Tax expense	(28)		—		(8)		—		(36)
Other comprehensive (loss) income, net of tax, before reclassifications	(114)		(3)		24		—		(93)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	—		1		—		2		3
Net (decrease) increase in other comprehensive income	(114)		(2)		24		2		(90)
Balance, net of tax, at June 30, 2022	$	(528)	$	(16)	$	(71)	$	(104)	$	(719)

At June 30, 2023 and December 31, 2022, the cumulative tax adjustments were $115 million and $100 million, respectively, primarily related to foreign currency translation adjustments.

The cumulative foreign currency translation adjustments included translation losses of $416 million and $438 million at June 30, 2023 and December 31, 2022, respectively, and cumulative losses on loans designated as hedges of net investments of $91 million and $84 million, respectively.

Reclassifications out of AOCI to the Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022 were not significant.

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NOTE 5 – EARNINGS PER COMMON SHARE

The computation of basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022 were as follows:

Basic Earnings Per Common Share	Three Months Ended				Six Months Ended
(in millions, except per share amounts)	2023		2022		2023		2022
Net income attributable to Dentsply Sirona	$	86	$	73	$	67	$	142
Weighted average common shares outstanding	211.9		214.9		213.2		215.9
Earnings per common share - basic	$	0.41	$	0.34	$	0.31	$	0.66
Diluted Earnings Per Common Share	Three Months Ended				Six Months Ended
(in millions, except per share amounts)	2023		2022		2023		2022
Net income attributable to Dentsply Sirona	$	86	$	73	$	67	$	142
Weighted average common shares outstanding	211.9		214.9		213.2		215.9
Incremental weighted average shares from assumed exercise of dilutive options from stock-based compensation awards	1.2		0.4		1.2		0.6
Total weighted average diluted shares outstanding	213.1		215.3		214.4		216.5
Earnings per common share - diluted	$	0.40	$	0.34	$	0.31	$	0.66

For the three and six months ended June 30, 2023, the Company excluded from the computation of weighted average diluted shares outstanding 3.8 million and 3.6 million, respectively, of equivalent shares of common stock from stock options and RSUs because their effect would be antidilutive. For the three and six months ended June 30, 2022, the Company excluded 4.0 million and 3.6 million, respectively, of equivalent shares of common stock outstanding from stock options and RSUs because their effect would be antidilutive.

On July 28, 2021, the Board of Directors approved a share repurchase program, of up to $1.0 billion. Share repurchases may be made through open market purchases, Rule 10b5-1 plans, accelerated share repurchases, privately negotiated transactions or other transactions in such amounts and at such times as the Company deems appropriate based upon prevailing market and business conditions and other factors. At June 30, 2023, the Company had authorization to repurchase $590 million in shares of common stock remaining under the share repurchase program.

On March 3, 2023, the Company entered into an Accelerated Share Repurchase Agreement ("ASR Agreement") with a financial institution to repurchase the Company's common stock. The Company repurchased shares under the ASR Agreement as part of the share repurchase program described above. During the six months ended June 30, 2023, the Company repurchased approximately 3.1 million shares delivered during March 2023 at a volume-weighted average price of $38.74 representing $120 million of the total anticipated repurchase. In April 2023, an additional 0.8 million shares were delivered upon the final settlement of the ASR Agreement resulting in a total 3.9 million shares repurchased under the agreement.

(in millions, except per share amounts)			Initial Delivery					Final Settlement
Agreement Date	Amount Paid		Shares Received	Price per share		Value of Shares as a % of Contract Value		Settlement Date	Total Shares Received	Average Price per Share
March 3, 2023	$	150	3.1	$	38.74	80	%	April 28, 2023	3.9	$	38.55

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The ASR Agreement was accounted for as an initial delivery of common shares in a treasury stock transaction on March 6, 2023 of $121 million and a forward contract indexed to the Company's common stock for an amount of common shares that was determined on the final settlement date. The forward contract met all applicable criteria for equity classification and was not accounted for as a derivative instrument for the quarter ended March 31, 2023. Therefore, the forward contract was recorded as Capital in excess of par value and upon final settlement in April 2023, was recorded as Treasury Stock in the Consolidated Balance Sheets at June 30, 2023. The initial delivery and final settlement of common stock reduced the weighted average common shares outstanding for both basic and diluted EPS. The forward contract did not impact the weighted average common shares outstanding for diluted EPS. The treasury stock transactions included an excise tax accrual of $1 million for public company stock repurchases established by the Inflation Reduction Act (IRA) of 2022.

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NOTE 6 – SEGMENT INFORMATION

Effective April 1, 2023 the Company realigned its reporting structure due to certain organizational changes. The Company has realigned its reportable segments to reflect changes in how the Company manages its operations, specifically the level at which its chief operating decision maker ("CODM") regularly reviews operating results and allocates resources. As a result, the reportable segments changed from Technology & Equipment and Consumables to (i) Connected Technology Solutions, (ii) Essential Dental Solutions, (iii) Orthodontic and Implant Solutions, and (iv) Wellspect Healthcare.

Segment Descriptions

A description of the products and services provided within each of the Company’s four reportable segments under the new structure is provided below.

Connected Technology Solutions

This segment is responsible for the design, manufacture and sales of the Company’s dental technology and equipment products. These products include the Equipment & Instruments and CAD/CAM product categories.

Equipment & Instruments

The Equipment & Instruments product category consists of basic and high-tech dental equipment such as imaging equipment, motorized dental handpieces, treatment centers, and other instruments for dental practitioners and specialists. Imaging equipment serves as the point of entry to the Company’s digital workflow offerings and consists of a broad range of diagnostic imaging systems for 2D or 3D, panoramic, and intra-oral applications, as well as cone-beam computed tomography systems (CBCT). Treatment centers comprise a broad range of products from basic dental chairs to sophisticated chair-based units with integrated diagnostic, hygienic and ergonomic functionalities, as well as specialist centers used in preventive treatment and for training purposes. This product group also includes other lab equipment such as amalgamators, mixing machines and porcelain furnaces.

CAD/CAM

Dental CAD/CAM technologies are products designed for dental offices to support numerous digital dental procedures including dental restorations. This product category includes a full-chairside economical restoration of esthetic ceramic dentistry offering called CEREC, as well as stand-alone CAD/CAM, digital impressions ("DI") intra-oral scanners, 3-D printer mills, and certain software and services. A full-chairside offering enables dentists to practice same day or single visit dentistry.

Essential Dental Solutions

This segment is responsible for the design, manufacture and sales of the Company's value-added endodontic, restorative, and preventive consumable products and small equipment used in dental offices for the treatment of patients. Offerings in this segment also include specialized treatment products including products used in the creation of dental appliances.

Essential Dental Solutions products are designed to operate in an integrated system to provide solutions for high-tech dental procedures. The endodontic products include drills, files, sealers, irrigation needles and other tools or single-use solutions which support root canal procedures. The restorative products include dental prosthetics such as artificial teeth, dental ceramics, and precious metal dental alloys.

The preventive products include small equipment products such as intraoral curing light systems, dental diagnostic systems and ultrasonic scalers and polishers, as well as other dental supplies including dental anesthetics, prophylaxis paste, dental sealants and impression materials.

Orthodontic and Implant Solutions

This segment is responsible for the design, manufacture, and sale of the Company’s various digital implant systems and innovative dental implant products, digital dentures and dentist directed aligner solutions. Offerings in this segment also include application of our digital services and technology, including those provided by our cloud-based platform.

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Orthodontics

The Orthodontics product category includes an in-office aligner solution, SureSmile, and a direct-to-consumer aligner solution, Byte. The Orthodontics product category also includes a High Frequency Vibration ("HFV") technology device known as VPro or as HyperByte within Byte's product offering. The aligner offerings include software technology that enables aligner treatment planning and seamless connectivity of a digital workflow from diagnostics through treatment delivery.

Implants & Prosthetics

The Implants & Prosthetics product category includes technology to support the Company's digital workflows for implant systems, a portfolio of innovative dental implant products, digital dentures, crown and bridge porcelain products, bone regenerative and restorative solutions, treatment planning software and educational programs. The Implants & Prosthetics product category is supported by key technologies including custom abutments, advanced tapered immediate load screws and regenerative bone growth factor.

Wellspect Healthcare

This segment is responsible for the design, manufacture, and sale of the Company’s innovative continence care solutions for management of both urinary and bowel dysfunction. This category consists mainly of urology catheters and other healthcare-related consumable products.

Segment Performance

The Company’s four operating segments are organized primarily by product. They generally have overlapping geographical presence, customer bases, distribution channels, and regulatory oversight, with the exception of Wellspect Healthcare which has a more discreet market and regulatory environment specific to the industry for medical devices. These operating segments, which also form the Company’s reportable segments, are identified in accordance with how the Company’s chief operating decision-maker regularly reviews financial results and uses this information to evaluate the Company’s performance and allocate resources.

The Company evaluates performance of the segments based on net sales and adjusted operating income. Segment adjusted operating income is defined as operating income before income taxes and before certain corporate headquarters unallocated costs, goodwill and intangible asset impairments, restructuring and other costs, interest expense, net, other expense (income), net, amortization of intangible assets and depreciation resulting from the fair value step-up of property, plant, and equipment from acquisitions.

The Company’s segment information for the three and six months ended June 30, 2023 and 2022 was as follows:

Net Sales

	Three Months Ended				Six Months Ended
(in millions)	2023		2022		2023		2022
Connected Technology Solutions	$	309	$	307	$	574	$	589
Essential Dental Solutions	377		380		763		736
Orthodontic and Implant Solutions	270		264		529		525
Wellspect Healthcare	72		72