GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

The Company’s policy is to assess goodwill and indefinite-lived intangible assets for impairment annually as of April 1, with more frequent assessments if events or changes in circumstances indicate a given asset might be impaired. For the goodwill impairment tests as of April 1, 2025, the Company utilized an income-based approach for the Implant & Prosthetic Solutions reporting unit within the Orthodontic and Implant Solutions segment and performed a qualitative assessment for the other two reporting units with goodwill balances, due to the significant excess of fair value over carrying value for those units.

As a result of the annual goodwill impairment test, the Company determined that the fair value of the Implant & Prosthetic Solutions reporting unit was below its carrying value. Fair value was determined using a discounted cash flow model based on

inputs developed from internal and market-based data, including ten-year forecasted cash flows plus a terminal value based on capitalizing the last period’s cash flows using a perpetual growth rate. The Company’s significant assumptions in the discounted cash flow model included, but were not limited to, a discount rate of 12.5%, revenue growth rates (including perpetual growth rates), operating margin percentages, and net working capital changes of the reporting unit’s business. The reduction in fair value for the Implant & Prosthetic Solutions reporting unit determined by this model was primarily driven by the impact of tariffs and lower projected volumes, due partly to competitive pressures, particularly in the United States and European markets. These factors contributed to reduced forecasted revenues, lower operating margins, and reduced expectations for future cash flows in the near term. As a result of this test, the Company recorded a pre-tax goodwill impairment charge as of June 30, 2025 of $156 million for the Implant & Prosthetic Solutions reporting unit within the Orthodontic and Implant Solutions segment, which was recorded in Goodwill and intangible asset impairment in the Consolidated Statement of Operations. Based on the qualitative assessment performed for the other reporting units, the Company believed there was no indication that the carrying value more likely than not exceeded the fair value in each case as of April 1, 2025.

Indefinite-lived intangible assets were assessed either through a computation of fair value using an income approach, specifically a relief from royalty method for acquired trade names and trademarks, or through a qualitative assessment for in-process research and development (“R&D”). The Company’s significant assumptions in the relief from royalty method included, but were not limited to, discount rates (ranging from 11.0% to 15.0%), revenue growth rates (including perpetual growth rates) and royalty rates, all of which were determined using the judgment of management. Other assumptions were consistent with those applied to goodwill impairment testing. These assumptions for both the goodwill and indefinite-lived intangible asset tests were developed in consideration of current market conditions and future expectations which included, but were not limited to, impact from competition and new product developments. In conjunction with this annual test, the Company identified impairments of certain indefinite-lived intangible assets including trade names and trademarks within the Connected Technology Solutions segment, and certain trade names within the Implant & Prosthetic Solutions reporting unit within the Orthodontic and Implant Solutions segment. The decline in fair value of the trade names and trademarks was driven by the impact of tariffs, which reduced the royalty rates used to value these assets, and lower volumes for the Company’s equipment and implant products due partly to competitive pressure, which contributed to reduced forecasted revenues. As a result of this test, the Company recorded pre-tax charges of $79 million to intangible assets as of June 30, 2025, consisting of $64 million within the Connected Technology Solutions segment and $15 million within the Implant & Prosthetic Solutions reporting unit, which were recorded in Goodwill and intangible asset impairment in the Consolidated Statement of Operations.

For the three months ended September 30, 2025, the Company considered additional qualitative and quantitative factors to determine whether any events or changes in circumstances had resulted in indicators of additional impairment of goodwill or indefinite-lived intangible assets. Due to the lower-than-expected results for Implant & Prosthetic Solutions, it was determined that the fair value of this reporting unit had declined below its carrying value. The updated fair value was computed in a manner consistent with the annual test described above, with the decline primarily driven by lower-than-expected volumes, particularly in the United States, and the impact of tariffs. As a result of the updated impairment testing, as of September 30, 2025, the Company recorded a pre-tax goodwill impairment charge of $253 million for the Implant & Prosthetic Solutions reporting unit. Additionally, review of the indefinite-lived intangible assets previously impaired as of June 30, 2025, using a consistent methodology as that which was used for the annual test, indicated a further decline in fair value as of September 30, 2025 due to lower volumes for the Company’s equipment and implant products. As a result, the Company recorded indefinite-lived intangible asset pre-tax impairment charges of $4 million and $5 million for the Connected Technology Solutions and Orthodontic and Implant Solutions segments, respectively, for the three months ended September 30, 2025.

Following these impairments, the fair values of the Implant & Prosthetic Solutions reporting unit and the abovementioned indefinite-lived intangible assets continued to approximate their carrying values as of September 30, 2025. Any further decline in key assumptions, such as an increase in the discount rate by 50 basis points or further reduction in projected revenues or margins, would likely lead to additional material impairments of the Implant & Prosthetic Solutions reporting unit, the above-mentioned intangible assets, or both. Additionally, the fair value of other assets within the Connected Technology Solutions segment, including fixed assets and definite-lived intangible assets, may be at risk of material impairment if forecasted revenues or margins for this business decline further, or if the Company is not able to adequately mitigate the impact of tariff costs in future years. Remaining goodwill associated with the Implant & Prosthetic Solutions reporting unit was $123 million as of September 30, 2025, which represents all remaining goodwill within the Orthodontic and Implant Solutions segment. The remaining carrying values of the indefinite-lived intangible assets within the Connected Technology Solutions and Orthodontic and Implant Solutions segments approximate fair value and were $105 million and $90 million, respectively, as of September 30, 2025.

There is a risk of future impairment charges if there is a decline in the fair value of the reporting units or indefinite-lived intangible assets as a result of, among other things, actual financial results that are lower than forecasts, an adverse change in valuation assumptions, a decline in equity valuations, increases in interest rates, or changes in the use of intangible assets. There can be no assurance that the Company’s future asset impairment testing will not result in a material charge to earnings.

A reconciliation of changes in the Company’s goodwill by reportable segment is as follows:


(in millions)	Connected Technology Solutions		Essential Dental Solutions		Orthodontic and Implant Solutions		Wellspect Healthcare		Total






















Balance at December 31, 2024
Goodwill	$	291	$	829	$	1,276	$	265	$	2,661
Accumulated impairment losses	(291)		—		(773)		—		(1,064)
Goodwill, net at December 31, 2024	—		829		503		265		1,597

Impairment	—		—		(409)		—		(409)
Foreign Currency Translation			29		29		24		82

Balance at September 30, 2025
Goodwill	$	291	$	858	$	1,305	$	289	$	2,743
Accumulated impairment losses	$	(291)	$	—	$	(1,182)	$	—	$	(1,473)
Goodwill, net at September 30, 2025	$	—	$	858	$	123	$	289	$	1,270

Identifiable definite-lived and indefinite-lived intangible assets were as follows:


	September 30, 2025						December 31, 2024
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount

Developed technology and patents	$	1,782	$	(1,296)	$	486	$	1,639	$	(1,079)	$	560
Trade names and trademarks	84		(78)		6		79		(73)		6
Licensing agreements	42		(29)		13		29		(28)		1
Customer relationships	1,098		(829)		269		1,019		(716)		303
Total definite-lived	3,006		(2,232)		774		2,766		(1,896)		870

Indefinite-lived trade names and trademarks	$	286	$	—	$	286	$	332	$	—	$	332
In-process R&D	5		—		5		5		—		5
Total indefinite-lived	291		—		291		337		—		337

Total identifiable intangible assets	$	3,297	$	(2,232)	$	1,065	$	3,103	$	(1,896)	$	1,207

In the nine months ended September 30, 2025, the Company acquired naming and certain other rights to a university dental laboratory in exchange for $14 million of equipment and consumable products to be transferred to the university through 2040. These rights were recorded as an intangible asset to be amortized over a fifteen-year period, with an offsetting contract liability that will be relieved as the equipment and products are provided to the university.