What changed in this filing

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Item 1. Financial Statements

2022-11-07 compared with 2022-11-07 · 249 added, 379 removed, 843 unchanged (43% of the section changed)

4 unchanged sentences

(in millions, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended March 31,

Cost of products sold

20 unchanged sentences

(in millions)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended March 31,

Other comprehensive

(loss) income, net of tax:

currency translation (loss) gain

loss, net of tax:

currency translation loss

derivative financial instruments

liability gain

comprehensive (loss) income, net of tax

comprehensive loss, net of tax

Total comprehensive

(loss) income

Comprehensive

1 unchanged sentence

Total comprehensive

(loss) income attributable to Dentsply Sirona

income attributable to Dentsply Sirona

See accompanying Notes to Unaudited Interim Consolidated Financial Statements.

3 unchanged sentences

(in millions, except per share amounts)

June 30, 2022

March 31, 2022

December 31, 2021

17 unchanged sentences

Preferred stock, $ 1.00 par value;

0.25 million shares

0.25 million shares authorized;

no shares issued

Common stock, $ 0.01 par value;

400.0 million shares authorized, and 264.5 million shares issued at June 30, 2022

and December 31, 2021

million and 217.4 million shares outstanding at June 30, 2022 and December 31, 2021

400.0 million shares authorized, and 264.5 million shares

issued at March 31, 2022 and December 31, 2021

million and 217.4 million shares outstanding at March 31, 2022 and December 31, 2021

excess of par value

other comprehensive loss

Treasury stock, at cost, 49.7 million and 47.1 million shares at June 30,

2022 and December 31, 2021, respectively

Treasury stock, at cost, 49.0 million and 47.1 million shares at March 31, 2022 and

December 31, 2021, respectively

Dentsply Sirona Equity

20 unchanged sentences

Balance at March 31,

Other comprehensive

Exercise of stock

compensation expense

Funding of employee

stock purchase plan

Accelerated share

Restricted stock unit

distributions

Restricted stock unit

Cash dividends declared ($ 0.125

Balance at June 30,

Comprehensive

12 unchanged sentences

Balance at March 31,

Other comprehensive

Exercise of stock

compensation expense

Restricted stock unit

distributions

Cash dividends declared ($ 0.11

Balance at June 30,

See accompanying Notes to Unaudited Interim Consolidated Financial Statements.

3 unchanged sentences

(in millions)

Six Months Ended June 30,

Three Months Ended March 31,

Cash flows from

25 unchanged sentences

derivative contracts

Proceeds from sale of

property, plant, and equipment

Other investing

Net cash used in

43 unchanged sentences

Recently Concluded Investigation

As previously disclosed, the Audit and Finance Committee of the Company’s Board of

Directors (the “Audit and Finance Committee”), assisted by independent legal counsel and forensic accountants, commenced an internal investigation in March 2022 of allegations regarding certain financial reporting matters submitted by current and

former employees of the Company.

In the North America Investigation, the Audit and Finance Committee concluded that there was no evidence of intentional wrongdoing or fraud.

The Audit and Finance Committee found that certain former members of

senior management, including the Company’s former Chief Executive Officer and former Chief Financial Officer, violated provisions of the Company’s Code of Ethics and Business Conduct.

In addition, these former members of senior management did not

maintain and promote an appropriate control environment focused on compliance in areas of the Company’s business, nor did they sufficiently promote, monitor or enforce adherence to the Code of Ethics and Business Conduct.

The North America

Investigation found that certain former members of senior management, including the former Chief Executive Officer and the former Chief Financial Officer created a culture where employees did not feel comfortable raising concerns without fear of

In addition, the North America Investigation substantiated certain allegations regarding inappropriate tone at the top by the former Chief Executive Officer and the former Chief Financial Officer.

Based on the China Investigation, the Audit and Finance Committee concluded that members of the Company’s local commercial team in

China, as well as the head of the Company’s Asia-Pacific commercial organization, committed intentional wrongdoing by failing to provide requested information to the Company’s local accounting team, by obstructing the work of the accounting team

and by lacking truthfulness in providing information to the Company and to the Audit and Finance Committee as part of the China Investigation.

The China Investigation also determined that these actions by the certain members of the Company’s

local commercial team in China, as well as the former Chief Financial Officer and the head of the Company’s Asia-Pacific commercial organization, violated the Company’s Code of Ethics and Business Conduct.

previously disclosed, the Audit and Finance Committee of the Company’s Board of Directors (the “Audit and Finance Committee”), assisted by independent legal counsel and forensic accountants, commenced an internal investigation in March 2022 of

allegations regarding certain financial reporting matters submitted by current and former employees of the Company.

In the North America Investigation, the Audit and Finance Committee concluded that there was no evidence of intentional wrongdoing

The Audit and Finance Committee found that certain former members of senior management, including the Company’s former Chief Executive Officer and former Chief Financial Officer, violated provisions of the Company’s Code of Ethics and

Business Conduct.

In addition, these former members of senior management did not maintain and promote an appropriate control environment focused on compliance in areas of the Company’s business, nor did they sufficiently promote, monitor or

enforce adherence to the Code of Ethics and Business Conduct.

The North America Investigation found that certain former members of senior management, including the former Chief Executive Officer and the former Chief Financial Officer

created a culture where employees did not feel comfortable raising concerns without fear of retaliation.

In addition, the North America Investigation substantiated certain allegations regarding inappropriate tone at the top by the former Chief

Executive Officer and the former Chief Financial Officer.

Based on the China Investigation, the Audit and Finance Committee

concluded that members of the Company’s local commercial team in China, as well as the head of the Company’s Asia-Pacific commercial organization, committed intentional wrongdoing by failing to provide requested information to the Company’s local

accounting team, by obstructing the work of the accounting team and by lacking truthfulness in providing information to the Company and to the Audit and Finance Committee as part of the China Investigation.

The China Investigation also determined

that these actions by the certain members of the Company’s local commercial team in China, as well as the former Chief Financial Officer and the head of the Company’s Asia-Pacific commercial organization, violated the Company’s Code of Ethics and

Business Conduct.

On October 29, 2022, the Audit and Finance Committee determined that its

investigation was complete, and authorized the filing of these interim consolidated financial statements for the three-month and six-month periods ended June 30, 2022.

investigation was complete, and authorized the filing of these interim consolidated financial statements for the three-month period ended March 31, 2022.

Correction of Previously Reported Interim Consolidated Quarterly Financial Statements

The interim consolidated financial statements include immaterial corrections to the

three-month and six-month periods ended June 30, 2021 which were presented in Note 23 to the audited consolidated financial statements and notes thereto for the year ended December 31, 2021 in the Company’s 2021 Form 10-K/A filed on November 7,

This revision, which corrects for errors related to certain customer incentive programs as well as the accounting and assumptions in the determination of estimates related to the Company’s sales returns provisions, warranty reserve

provisions and variable consideration, as well as other immaterial adjustments, results in a decrease to Net sales by $ 5 million, a

decrease to Gross Profit by $ 3 million, a decrease to Operating Income of $ 1 million and a decrease to Diluted EPS by $ 0.02 per share from

amounts previously reported for the three-month period ended June 30, 2021.

This revision results in a decrease to Net sales by $ 6

million, a decrease to Gross Profit by $ 3 million, a decrease to Operating Income of $ 5 million and a decrease to Diluted EPS by $ 0.04 per share from

amounts previously reported for the six-month period ended June 30, 2021.

Previously reported cash flows from operating, investing and financing activities for the six-month period ended June 30, 2021 were not impacted.

The interim consolidated financial statements include immaterial corrections to the three-month period ended March 31, 2021 which were presented in Note 23 to the audited

consolidated financial statements and notes thereto for the year ended December 31, 2021 in the Company’s 2021 Form 10-K/A filed on November 7, 2022.

This revision, which corrects for errors related to certain customer incentive programs as well

as the accounting and assumptions in the determination of estimates related to the Company’s sales returns provisions, warranty reserve provisions and variable consideration, as well as other immaterial adjustments, results in a decrease to Net

sales by $ 1 million, a decrease to Operating Income by $4 million and a decrease to Diluted EPS by $0.02 from amounts previously

reported for the three-month period ended March 31, 2021.

This revision did not result in a change to previously reported Gross Margin for the three-month period ended March 31, 2021.

Previously reported cash flows from operating,

investing and financing activities for the three-month period ended March 31, 2021 were not impacted.

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 2021 Form 10-K/A filed on November 7, 2022, except as may be indicated below.

Use of Estimates

3 unchanged sentences

Actual results could differ materially from those estimates.

Specifically, for the three months ended June 30, 2022, some of these estimates and

Specifically, for the three months ended March 31, 2022, some of these estimates and

assumptions continue to be based on an ongoing evaluation of expected future impacts from the COVID-19 pandemic.

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the pandemic continue to be experienced in the form of more recent shortages and higher prices of raw materials such as electronic components, higher related transportation costs, and labor shortages.

In the second quarter of 2022, the Company

has continued to experience supply chain constraints, which has impacted its ability to timely produce and deliver certain products, and has also resulted in increases in shipping rates.

To address these issues, the Company has taken steps to

mitigate the impact of these trends, including continued emphasis on cost reduction and supply chain efficiencies.

However, uncertainties remain regarding how long these impacts will continue, whether customer demand will fully return to

pre-COVID-19 levels upon lifting of remaining government restrictions, or whether future variants of the virus may have an adverse impact on demand in affected markets.

In the first quarter of 2022, the Company has

experienced supply chain constraints, which has impacted its ability to timely produce and deliver certain products, and has also resulted in increases in shipping rates.

To address these issues, the Company has taken steps to mitigate the impact

of these trends, including continued emphasis on cost reduction and supply chain efficiencies.

However, uncertainties remain regarding how long these impacts will continue, whether customer demand will fully return to pre-COVID-19 levels upon

lifting of remaining government restrictions, or whether future variants of the virus may have an adverse impact on demand in affected markets.

Accounting Pronouncements Not Yet Adopted

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goods or providing services.

Net sales disaggregated by product category for the three and six

months ended June 30, 2022 and 2021 were as follows:

Net sales disaggregated by product category for the three months ended March 31,

2022 and 2021 were as follows:

Three Months Ended

Six Months Ended

(in millions)

3 unchanged sentences

Total net sales

Net sales disaggregated by geographic region for the three and six

months ended June 30, 2022 and 2021 were as follows:

Net sales disaggregated by geographic region for the three months ended March 31,

2022 and 2021 were as follows:

Three Months Ended

Six Months Ended

(in millions)

6 unchanged sentences

The Company had $ 64 million and $ 68 million of deferred

revenue recorded in Accrued liabilities in the Consolidated Balance Sheets at June 30, 2022 and December 31, 2021, respectively.

revenue recorded in Accrued liabilities in the Consolidated Balance Sheets at March 31, 2022 and December 31, 2021, respecti vely .

Prior year deferred revenue of approximately $ 32 million was recognized in the current year.

The Company expects to recognize significantly all of the remaining deferred revenue within the next twelve months.

The Company expects to recognize significantly all of the remaining deferred revenue within the next

twelve months.

Allowance for Doubtful Accounts

Accounts and notes receivables-trade, net are stated net of allowances for doubtful

accounts and trade discounts, which were $ 12 million at June 30, 2022 and $ 13 million at December 31, 2021.

For the three months and six months ended June 30, 2022 and 2021, changes to the provision for doubtful accounts including write-offs of

accounts receivable that were previously reserved were insignificant.

accounts and trade discounts, which were $ 11 million at March 31, 2022 and $ 13 million at December 31, 2021.

For the three months ended March 31, 2022 and 2021, 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.

1 unchanged sentence

The amounts of stock compensation expense recorded in the Company’s Consolidated

Statements of Operations for the three and six months ended June 30, 2022 and 2021 were as follows:

Statements of Operations for the three months ended March 31, 2022 and 2021 were as follows:

Three Months Ended

Six Months Ended

(in millions)

9 unchanged sentences

Changes in Accumulated other comprehensive income (loss) (“AOCI”),

net of tax, by component for the six months ended June 30, 2022 and 2021 were as follows:

net of tax, by component for the three months ended March 31, 2022 and 2021 were as follows:

(in millions)

12 unchanged sentences

at March 31, 2022

comprehensive (loss) income before reclassifications and tax impact

comprehensive (loss) income, net of tax, before reclassifications

reclassified from accumulated other comprehensive income, net of tax

Net (decrease)

increase in other comprehensive income

Balance, net of tax,

at June 30, 2022

(in millions)

13 unchanged sentences

at March 31, 2021

comprehensive income before reclassifications and tax impact

comprehensive income, net of tax, before reclassifications

reclassified from accumulated other comprehensive income, net of tax

in other comprehensive income

Balance, net of tax,

at June 30, 2021

At June 30, 2022 and December 31, 2021, the cumulative tax

adjustments were $ 120 million and $ 168

million, respectively, primarily related to foreign currency translation adjustments.

At March 31, 2022 and December 31, 2021, the cumulative tax adjustments were $ 156 million and $ 168 million,

respectively, primarily related to foreign currency translation adjustments.

The cumulative foreign currency translation adjustments included translation losses

of $ 313 million and $ 250

million at June 30, 2022 and December 31, 2021, respectively, and cumulative losses on loans designated as hedges of net investments of $ 68

million at March 31, 2022 and December 31, 2021, respectively, and cumulative losses on loans designated as hedges of net investments of $ 101

million and $ 116 million, respectively.

2 unchanged sentences

Reclassifications out of AOCI to the Consolidated Statements of Operations for the

three and six months ended June 30, 2022 and 2021 were insignificant.

three months ended March 31, 2022 and 2021 were insignificant.

NOTE 5 – EARNINGS PER

The computation of basic and diluted earnings per common share for

the three and six months ended June 30, 2022 and 2021 were as follows:

the three months ended March 31, 2022 and 2021 were as follows:

Basic Earnings Per Common Share

Three Months Ended

Six Months Ended

(in millions, except per share amounts)

6 unchanged sentences

Three Months Ended

Six Months Ended

(in millions, except per share amounts)

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share - diluted

For the three and six months ended June 30, 2022, the Company excluded from the

computation of weighted average diluted shares outstanding 4.0 million and 3.6 million 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, 2021, the

Company excluded 0.5 million and 0.7

million of equivalent shares of common stock outstanding from stock options and RSUs because their effect would be antidilutive.

For the three months ended March 31, 2022, the Company excluded from the computation

of weighted average diluted shares outstanding 1.9 million of equivalent shares of common stock from stock options and RSUs because

their effect would be antidilutive.

For the three months ended March 31, 2021, the Company excluded 0.8 million of equivalent shares

of common stock outstanding from stock options and RSUs because their effect would be antidilutive.

The Board of Directors has approved a share repurchase program, up to $ 1.0 billion.

1 unchanged sentence

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, 2022, the Company had authorization to repurchase $ 740 million in shares of common stock remaining under the share repurchase program.

At March 31, 2022, the Company had authorization to repurchase $ 770 million in shares of common stock remaining under the share repurchase program, which was further reduced by $ 30 million through final settlement of the accelerated share repurchase program in April 2022 as described below.

On March 8, 2022, the Company entered into an Accelerated Share Repurchase Agreement

16 unchanged sentences

derivative instrument.

Therefore, the forward contract was recorded as Capital in excess of par value and upon final settlement was recorded as Treasury Stock in the Consolidated Balance Sheets at June 30, 2022.

The initial delivery and final

settlement of common stock reduced the weighted average common shares outstanding for both basic and diluted EPS.

Therefore, the forward contract was recorded as Capital in excess of par value in the Consolidated Balance Sheets at March 31, 2022.

The initial delivery 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.

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The acquisition is expected to further accelerate the development of the Company’s specialized software related to CAD/CAM systems.

The fair values of the assets acquired and liabilities assumed in connection with

the acquisition of the affiliate included $ 4 million of Other current assets, $ 3 million of Intangible assets, $ 2 million of Current

The preliminary fair values of the assets acquired and liabilities assumed in

connection with the acquisition of the affiliate included $ 4 million of Other current assets, $ 3 million of Intangible assets, $ 2 million of Current

Liabilities and $ 1 million of Other long-term liabilities.

The cash paid and the $ 4 million fair value of the previously-held interest in the entity prior to the acquisition has been allocated on the basis of the estimates of fair values of assets acquired

and liabilities assumed, resulting in the recording of $ 7 million in goodwill.

This goodwill is considered to represent the value

associated with the acquired workforce and synergies the Company anticipates realizing from integrating the acquired assets into the Company’s existing business operations, and is not deductible for tax purposes.

Measurement period adjustments

made to the fair values of the assets acquired and liabilities assumed during the year ended December 31, 2021 and the six months ended June 30, 2022 were immaterial to the financial statements, resulting in an increase to goodwill of $ 2 million.

The cash paid and the $ 4 million fair value of the previously-held interest in the entity prior to the acquisition has been allocated on the basis of the preliminary estimates of fair values of

assets acquired and liabilities assumed, resulting in the recording of $ 7 million in goodwill.

This goodwill is considered to represent

the value associated with the acquired workforce and synergies the Company anticipates realizing from integrating the acquired assets into the Company’s existing business operations, and is not deductible for tax purposes.

Measurement period

adjustments made to the fair values of the assets acquired and liabilities assumed during the year ended December 31, 2021 and the quarter ended March 31, 2022 were immaterial to the financial statements, resulting in an increase to goodwill of $ 2 million.

Management is continuing to finalize its valuation of certain assets and liabilities including other intangible assets and will conclude

its valuation no later than one year from the acquisition date.

Identifiable intangible assets acquired were as follows:

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The acquisition is expected to further accelerate the growth and profitability of the Company’s combined clear aligners business.

The fair values of the assets acquired and liabilities assumed in connection with

the Propel Orthodontics acquisition were as follows:

The preliminary fair values of the assets acquired and liabilities assumed in

connection with the Propel Orthodontics acquisition were as follows:

(in millions)

4 unchanged sentences

consideration

The purchase price has been allocated on the basis of the estimates of fair values

of assets acquired and liabilities assumed, resulting in the recording of $ 63 million in goodwill, which is considered to represent the

value associated with the acquired workforce and synergies the Company anticipates realizing from integrating the acquired assets into the Company’s existing business operations.

The goodwill is expected to be deductible for tax purposes.

Measurement period adjustments made to the fair values of the assets acquired and liabilities assumed during the year ended December 31, 2021 and the six months ended June 30, 2022 were immaterial to the financial statements, resulting in a

reduction to goodwill of $ 2 million.

The purchase price has been allocated on the basis of the preliminary estimates of

fair values of assets acquired and liabilities assumed, resulting in the recording of $ 63 million in goodwill, which is considered to

represent the value associated with the acquired workforce and synergies the Company anticipates realizing from integrating the acquired assets into the Company’s existing business operations.

The goodwill is expected to be deductible for tax

Management is continuing to finalize its valuation of certain assets including other intangible assets and will conclude its valuation no later than one year from the acquisition date.

Measurement period adjustments made to the fair

values of the assets acquired and liabilities assumed during the year ended December 31, 2021 and the quarter ended March 31, 2022 were immaterial to the financial statements, resulting in a reduction to goodwill of $ 2 million.

Identifiable intangible assets acquired were as follows:

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Developed technology

On January 21, 2021, the effective date of the transaction, the Company paid $ 94 million with the potential for additional earn-out provision payments of up to $ 10 million, to acquire 100 % of the outstanding shares of Datum

Dental, Ltd., a privately-held producer and distributor of specialized regenerative dental material based in Israel.

a privately-held producer and distributor of specialized regenerative dental material based in Israel.

The fair value of the earn-out provision has been valued at $ 9 million as of the transaction date, resulting in a total purchase price of $ 103 million.

15 unchanged sentences

Measurement period

adjustments made to the fair values of the assets acquired and liabilities assumed during the year ended December 31, 2021 and the six months ended June 30, 2022 were immaterial to the financial statements, resulting in an increase to goodwill of

adjustments made to the fair values of the assets acquired and liabilities assumed during the year ended December 31, 2021 and the three months ended March 31, 2022 were immaterial to the financial statements, resulting in an increase to goodwill

of $ 6 million.

Identifiable intangible assets acquired were as follows:

5 unchanged sentences

effective date of each transaction have been included in the accompanying financial statements.

These results, as well as the historical results for the above acquired businesses for the periods ended June 30, 2022 and June 30, 2021, are not

These results, as well as the historical results for the above acquired businesses for the periods ended March 31, 2022 and March 31, 2021, are not

material in relation to the Company’s net sales and earnings for those periods.

2 unchanged sentences

Investment in Affiliates

On June 4, 2021, the effective date of the transaction, the

Company paid $ 16 million to acquire a minority interest in a U.K.-based, privately-held provider of healthcare consumables.

investment is recorded as an equity method investment within Other noncurrent assets in the Consolidated Balance Sheets.

On June 4, 2021, the effective date of the transaction, the Company paid $ 16 million to acquire a minority interest in a U.K.-based, privately-held provider of healthcare consumables.

The investment is recorded as an equity

method investment within Other noncurrent assets in the Consolidated Balance Sheets.

On April 1, 2021, the Company disposed of certain orthodontics businesses based in

4 unchanged sentences

The divestiture resulted in a

pre-tax gain of $ 13 million recorded in Other expense (income), net in the Consolidated Statements of Operations for the six months

ended June 30, 2021.

pre-tax gain of $ 13 million recorded in Other expense (income), net in the Consolidated Statements of Operations for the three months

ended March 31, 2021.

NOTE 7 – SEGMENT

The Company’s two operating segments are organized primarily by product and generally have overlapping geographical presence, customer bases, distribution channels, and regulatory

These operating segments are also the Company’s reportable segments in accordance with how the Company’s chief operating decision-maker regularly reviews financial results and uses this information to evaluate the Company’s performance

and allocate resources.

The Company’s two operating segments are organized primarily by product and generally have overlapping geographical presence, customer bases, distribution channels, and regulatory oversight.

operating segments are also the Company’s reportable segments in accordance with how the Company’s chief operating decision-maker regularly reviews financial results and uses this information to evaluate the Company’s performance and allocate

The Company evaluates performance of the segments based on net sales and adjusted

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consumable products which include various preventive, restorative, endodontic, and dental laboratory products.

The Company’s segment information for the three and six months ended June 30, 2022

and 2021 was as follows:

The Company’s segment information for the three months ended March 31, 2022 and

2021 was as follows:

Three Months Ended

Six Months Ended

(in millions)

2 unchanged sentences

Three Months Ended

Six Months Ended

(in millions)

16 unchanged sentences

(in millions)

June 30, 2022

March 31, 2022

December 31, 2021

2 unchanged sentences

Finished goods

Company’s inventory reserve was $ 79 million and $ 86 million at June 30, 2022 and December 31, 2021, respectively.

Inventories are stated at the lower of cost

and net realizable value.

Company’s inventory reserve was $ 86 million at both March 31, 2022 and December 31, 2021.

Inventories are stated at the lower of cost and net realizable value.

NOTE 9 – RESTRUCTURING

AND OTHER COSTS

Restructuring and other costs for the three and six months ended

June 30, 2022 and 2021 were as follows:

Restructuring and other costs for the three months ended March 31,

2022 and 2021 were immaterial to the Company’s Consolidated Statements of Operations as shown below:

Affected Line Item in the Consolidated

1 unchanged sentence

Three Months Ended

Six Months Ended

(in millions)

Cost of products sold

Selling, general, and

administrative expenses

Restructuring and

restructuring and other costs

The Company’s restructuring accruals at June 30, 2022 were as

The Company’s restructuring accruals at March 31, 2022 were as

(in millions)

Balance at December

Balance at June 30,

Balance at March 31,

Other Restructuring Costs

1 unchanged sentence

Balance at December

Balance at June 30,

Balance at March 31,

The cumulative amounts for the provisions and adjustments and amounts applied for all the plans by segment were as follows:

1 unchanged sentence

December 31, 2021

Change in Estimates

June 30, 2022

March 31, 2022

Technologies &

15 unchanged sentences

The following summarizes the notional amounts of cash flow hedges,

hedges of net investments, fair value hedges, and derivative instruments not designated as hedges for accounting purposes by derivative instrument type at June 30, 2022 and the notional amounts expected to mature during the next 12 months.

hedges of net investments, fair value hedges, and derivative instruments not designated as hedges for accounting purposes by derivative instrument type at March 31, 2022 and the notional amounts expected to mature during the next 12 months.

(in millions)

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This loss is amortized over the ten-year life of the notes.

As of June 30, 2022 and December 31, 2021, $ 23 million and $ 25 million, respectively, of this loss is remaining to be amortized from AOCI in

future periods.

As of March 31, 2022 and December 31, 2021, $ 24 million and $ 25 million, respectively, of this loss is remaining to be

amortized from AOCI in future periods.

Overall, the derivatives designated as cash flow hedges are considered to be highly

effective for accounting purposes.

At June 30, 2022, the Company expects to reclassify an immaterial amount of deferred net losses on cash flow hedges recorded in AOCI in the Consolidated Statements of Operations during the next 12 months.

At March 31, 2022, the Company expects to reclassify an immaterial amount of deferred net losses on cash flow hedges recorded in AOCI in the Consolidated Statements of Operations during the next 12 months.

the rollforward of derivative instruments designated as cash flow hedges in AOCI see Note 4, Comprehensive Income (Loss).

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contracts within the portfolio mature.

As of June 30, 2022 the euro net investment hedge portfolio has an aggregate notional value of 160

million euro with maturity dates through June 2024.

As of March 31, 2022 the euro net investment hedge portfolio has an aggregate notional value of 160

million euro with maturity dates through March 2024.

Fair Value Hedges

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due June 2030 to a variable interest rate.

Of the $ 250 million notional amount, $ 100 million has a term of five-years maturing on June 1, 2026

and $ 150 million has a term of nine years

Of the $ 250 million notional amount, $ 100 million has a term of five-years maturing on June 1, 2026 and $ 150 million has a term of nine years

maturing on March 1, 2030.

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Gains and (losses) recorded in the Company’s Consolidated Statements of Operations

related to the economic hedges not designated as hedges for the three and six months ended June 30, 2022 and 2021 were insignificant.

related to the economic hedges not designated as hedges for the three months ended March 31, 2022 and 2021 were insignificant.

Derivative Instrument Activity

The amount of gains and losses recorded in the Company’s Consolidated Balance Sheets and Consolidated Statements of Operations related to all derivative instruments for the three months ended June 30, 2022

and 2021 were as follows:

Three Months Ended June 30, 2022

The amount of gains and losses recorded in the Company’s

Consolidated Balance Sheets and Consolidated Statements of Operations related to all derivative instruments for the three months ended March 31, 2022 and 2021 were as follows:

Three Months Ended March 31, 2022

(in millions)

20 unchanged sentences

Fair Value Hedges

exchange forward contracts

Other expense

(income), net

Total for fair value

Three Months Ended June 30, 2021

(in millions)

Recognized in AOCI

Statements of Operations Location

Effective Portion

Reclassified from AOCI into Income (Expense)

Recognized in

Income (Expense)

Cash Flow Hedges

exchange forward contracts

Cost of products sold

Interest rate

Interest expense, net

Total for cash flow

Hedges of Net Investments

Cross currency

Interest expense, net

exchange forward contracts

1 unchanged sentence

(income), net

Total for net

investment hedging

Fair Value Hedges

exchange forward contracts

Interest expense, net

Total for fair value

The amount of gains and losses recorded in the Company’s Consolidated Balance Sheets

and Consolidated Statements of Operations related to all derivative instruments for the six months ended June 30, 2022 and 2021 were as follows:

Six Months Ended June 30, 2022

Three Months Ended March 31, 2021

(in millions)

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Interest expense, net

exchange forward contracts

Other expense

(income), net

Total for net

1 unchanged sentence

Fair Value Hedges

Interest rate

Interest expense, net

exchange forward contracts

Other expense

(income), net

Total for fair value

Six Months Ended June 30, 2021

(in millions)

recognized in AOCI

Statements of Operations Location

Effective Portion

Reclassified from AOCI into Income (Expense)

Recognized in

Income (Expense)

Cash Flow Hedges

exchange forward contracts

Cost of products sold

Interest rate

Interest expense, net

Total for cash flow

Hedges of Net Investments

Cross currency

Interest expense, net

exchange forward contracts

Other expense

(income), net

Total for net

investment hedging

Fair Value Hedges

exchange forward contracts

Other expense

(income), net

Total for fair value

Consolidated Balance Sheets Location of Derivative Fair Values

The fair value and the location of the Company’s derivatives in the Consolidated

Balance Sheets were as follows:

June 30, 2022

The fair value and the location of the Company’s derivatives in

the Consolidated Balance Sheets were as follows:

March 31, 2022

(in millions)

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arrangements with the same counterparty, the Company elects to present them on a gross basis in the Consolidated Balance Sheets.

Offsetting of financial assets and liabilities under netting arrangements at June 30,

2022 were as follows:

Offsetting of financial assets and liabilities under netting arrangements at

March 31, 2022 were as follows:

Gross Amounts Not Offset in the Consolidated

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current portion, was $ 2,251 million and $ 2,219

million, respectively, at June 30, 2022.

million, respectively, at March 31, 2022.

At December 31, 2021, the estimated fair value and carrying value were $ 2,239 million and $ 2,095 million, respectively.

The fair value of long-term debt is based on recent trade information in the financial markets of the Company’s public

debt or is determined by discounting future cash flows using interest rates available at June 30, 2022 and December 31, 2021 to companies with similar credit ratings for issues with similar terms and maturities.

debt or is determined by discounting future cash flows using interest rates available at March 31, 2022 and December 31, 2021 to companies with similar credit ratings for issues with similar terms and maturities.

It is considered a Level 2 fair

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value hierarchy that were accounted for at fair value on a recurring basis were as follows:

June 30, 2022

March 31, 2022

(in millions)

Interest rate

Cross currency

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In addition, the Company at times employs certain

cross currency basis swaps and forward exchange contracts that are considered hedges of net investment in foreign operations.

There have been no transfers between levels during the six months ended June 30,

cross currency interest rate swaps and forward exchange contracts that are considered hedges of net investment in foreign operations.

There have been no transfers between levels during the three months ended March 31,

NOTE 12 – INCOME TAXES

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The impact of discrete items is separately recognized in the quarter in which they

During the three months ended June 30, 2022, changes in tax expense for other discrete tax matters are not significant.

During the six months ended June 30, 2022, the Company recorded $ 1 million of tax expense for other discrete tax matters.

The decrease in the effective tax rate is due to the overall decrement in the Company’s performance and the

corresponding earnings mix of jurisdictions in which Company does business.

the three and six months ended June 30, 2021, the Company recorded $ 3 million and $ 2 million, respectively, of tax expense for other discrete tax matters.

During the three months ended March 31, 2022, the Company recorded $ 1 million of tax expense for other discrete tax matters,

none of which are individually significant.

The decrease in the effective tax rate is due to the overall decrement in the Company’s performance and the corresponding earnings mix of jurisdictions in which Company does business.

During the three months ended March 31, 2021, the Company recorded $ 1 million of tax benefit for other discrete tax matters.

The Company also recorded a $ 4 million tax expense as a discrete item related to business divestitures.

NOTE 13 – FINANCING

At June 30, 2022, the Company had $ 535 million of borrowing available under lines of credit, including lines available under its short-term arrangements and revolving credit facility.

At March 31, 2022, the Company had $ 399 million of borrowing available under lines of credit, including lines available under its short-term arrangements and revolving credit facility.

The Company has a $ 500 million commercial paper program.

The Company had $ 193

million and $ 170 million outstanding borrowings under the commercial paper facility at June 30, 2022 and December 31, 2021,

respectively.

The Company also has a $ 700 million multi-currency revolving credit facility which serves as a back-stop credit facility

for the Company’s commercial paper program.

At June 30, 2022 and December 31, 2021, there were no outstanding borrowings under the

multi-currency revolving credit facility.

The Company also has access to $ 54 million in uncommitted short-term financing under lines of

credit from various financial institutions, the availability of which is reduced by other short-term borrowings of $26 million.

At June 30, 2022, the weighted-average interest rate for short-term debt was 2.2 %.

The Company had $ 330 million and $ 170 million outstanding borrowings under the commercial paper facility at March 31, 2022 and December 31, 2021, respectively.

The Company also has a $ 700 million multi-currency revolving credit facility which serves as a back-stop credit facility for the Company’s commercial paper program.

March 31, 2022 and December 31, 2021, there were no outstanding borrowings under the multi-currency revolving credit facility.

Company also has access to $ 43 million in uncommitted short-term financing under lines of credit from various financial institutions,

the availability of which is reduced by other short-term borrowings of $ 14 million.

At March 31, 2022, the weighted-average interest

rate for short-term debt was 1.2 %.

The Company’s revolving credit facility, term loans and senior notes contain certain

affirmative and negative debt covenants relating to the Company’s operations and financial condition.

At June 30, 2022, the Company was in compliance with all debt covenants.

As a result of the Company’s failure to file its unaudited financial statements for the fiscal quarters ended March 31, 2022 and June 30, 2022 by the reporting deadlines, the

Company obtained the consents of the requisite lenders and noteholders of its outstanding indebtedness to extend the time period for delivery of such unaudited financial statements until November 14, 2022.

Therefore, the Company has not suffered

an event of default as a result of the delayed filings

At March 31, 2022, the Company was in compliance with all debt covenants.

T he Company is required under certain of its debt agreements to deliver or make available to borrowers its unaudited financial statements on a timely basis each quarter along with

the necessary certifications.

As a result of the Company’s failure to file its unaudited financial statements for the fiscal quarters ended March 31, 2022 and June 30, 2022 by the reporting deadlines, the Company obtained the consents of the

requisite lenders and noteholders of its outstanding indebtedness to extend the time period for delivery of such unaudited financial statements until November 14, 2022.

Therefore, the Company has not suffered an event of default as a result of

the delayed filings.

NOTE 14 – GOODWILL

AND INTANGIBLE ASSETS

The Company assesses both goodwill and indefinite-lived intangible assets for

impairment annually as of April 1 or more frequently if events or changes in circumstances indicate the asset might be impaired.

Based on the Company’s 2022 impairment test, it was determined that the fair values of its reporting units and

indefinite-lived intangible assets more likely than not exceeded their respective carrying values, resulting in no impairment.

The fair values of reporting units were computed using a discounted cash flow model

with inputs developed using both internal and market-based data.

The Company assesses both goodwill and indefinite-lived intangible

assets for impairment annually as of April 1 or more frequently if events or changes in circumstances indicate the asset might be impaired.

Based on the Company’s 2021 impairment test, it was determined that the fair values of its reporting units

and indefinite-lived intangible assets more likely than not exceeded their respective carrying values, resulting in no impairment.

The fair values of reporting units were computed using a

discounted cash flow model with inputs developed using both internal and market-based data.

Intangible assets were evaluated for impairment using an income approach, specifically a relief from royalty method, or using a qualitative assessment.

A change in any of the

estimates and assumptions used in the annual test, a decline in the overall markets or in the use of intangible assets among other factors, could have a material adverse effect to the fair value of either the reporting units or intangible assets

and could result in a future impairment charge.

change in any of the estimates and assumptions used in the annual test, a decline in the overall markets or in the use of intangible assets among other factors, could have a material adverse effect to the fair value of either the reporting units

or intangible assets and could result in a future impairment charge.

There can be no assurance that the Company’s future asset impairment testing will not result in a material charge to earnings.

The Company’s significant assumptions in the discounted cash flow

model included, but were not limited to, the weighted average cost of capital, revenue growth rates (including perpetual growth rates), and operating margin percentages of the reporting unit’s business.

While we consider these assumptions to be

reasonable and appropriate, they are subjective, and additional adverse changes in these key assumptions, as well as unfavorable changes in the overall markets served by these reporting units, among other factors, would have a negative material

impact to the fair value of the reporting units and indefinite-lived intangible assets and would result in a future impairment charge.

As disclosed in Note 16- Subsequent Events, the company anticipates recording a pre-tax charge for the impairment of goodwill and indefinite-lived

intangible assets in the range of $ 1.0 billion - $ 1.3 billion in the third quarter 2022.

The timing of this impairment charge in the third quarter was the result of the following factors:

Current macroeconomic conditions, including the rising interest rate environment and broad declines in equity valuations.

Since the second quarter, core

underlying market interest rates, which serve as the basis for the discount rate assumptions in our impairment models, rose by approximately 200

basis points.

Reduced earnings forecasts for several reporting units as these forecasts were impacted by ongoing macroeconomic forces.

First, global demand has weakened

for certain products in the third quarter as inflationary pressures impacted the discretionary spending behavior of our customers, which has introduced new competitive challenges.

Additionally, raw materials, supply chain, and service

costs have all increased due to changes in our business model and broad inflationary trends.

For additional information on evaluations subsequent to June 30, 2022, including the

likely impairment of goodwill and indefinite-lived intangibles identified during the third quarter of 2022, refer to the Note 16- Subsequent Events.

A reconciliation of changes

in the Company’s goodwill by reportable segment were as follows:

Subsequent to the annual impairment test, the Company considered

qualitative and quantitative factors as of March 31, 2022 to determine whether any events or changes in circumstances had resulted in the likelihood that the goodwill or indefinite-lived intangible assets may have become more likely than not

impaired during the course of the quarter, and concluded there were no such indicators.

A reconciliation of changes in the Company’s goodwill by

reportable segment were as follows:

(in millions)

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Translation and other

Balance at June 30,

Balance at March 31,

impairment losses

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were as follows:

June 30, 2022

March 31, 2022

December 31, 2021

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purchase consideration also includes minimum guaranteed contingent payments of $ 17 million to be made upon reaching certain regulatory

and commercial milestones.

The contingent payments are not yet considered probable of payment as of June 30, 2022.

and commercial milestones, which were not yet considered probable of payment as of March 31, 2022.

NOTE 15 – COMMITMENTS

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The expected settlement amount,

which is immaterial to the financial statements, has been recorded as an accrued liability within the Company’s consolidated balance sheet as of June 30, 2022.

On June 7, 2018, and August 9, 2018, two putative class action suits were filed, and later consolidated, in the Supreme Court of the State of New York, County of New York claiming that the Company and certain

individual defendants, violated U.S.

securities laws (the “State Court Action”) by making material misrepresentations and omitting required information in the December 4, 2015 registration statement filed with the SEC in connection with the 2016

merger of Sirona Dental Systems Inc.

which is immaterial to the financial statements, has been recorded as an accrued liability within the Company’s

consolidated balance sheet as of March 31, 2022.

On June 7, 2018, and August 9, 2018, two putative class action suits were filed, and

later consolidated, in the Supreme Court of the State of New York, County of New York claiming that the Company and certain individual defendants, violated U.S.

securities laws (the “State Court Action”) by making material misrepresentations and

omitting required information in the December 4, 2015 registration statement filed with the SEC in connection with the 2016 merger of Sirona Dental Systems Inc.

(“Sirona”) with DENTSPLY International Inc.

(the “Merger”).

The amended complaint alleges that the defendants failed to disclose, among other things, that a distributor had purchased excessive inventory of

legacy Sirona products and that three distributors of the Company’s products had been engaging in anticompetitive conduct.

The plaintiffs seek to recover damages on behalf of a class of former Sirona shareholders who exchanged their shares for

shares of the Company’s stock in the Merger.

On September 26, 2019, the Court granted the Company’s motion to dismiss all claims and a judgment dismissing the case was subsequently entered.

On February 4, 2020, the Court denied plaintiffs’

post-judgment motion to vacate or modify the judgment and to grant them leave to amend their complaint.

The plaintiffs appealed the dismissal and the denial of the post-judgment motion to the Supreme Court of the State of New York, Appellate

Division, First Department, and the Company cross-appealed select rulings in the Court’s decision dismissing the action.

The plaintiffs’ appeals and the Company’s cross-appeal were consolidated and argued on January 12, 2021.

On February 2, 2021,

the Appellate Division issued its decision upholding the dismissal of the State Court Action with prejudice on statute of limitations grounds.

The amended complaint

alleges that the defendants failed to disclose, among other things, that a distributor had purchased excessive inventory of legacy Sirona products and that three distributors of the Company’s products had been engaging in anticompetitive conduct.

The plaintiffs seek to recover damages on behalf of a class of former Sirona shareholders who exchanged their shares for shares of the Company’s stock in the Merger.

On September 26, 2019, the Court granted the Company’s motion to dismiss all

claims and a judgment dismissing the case was subsequently entered.

On February 4, 2020, the Court denied plaintiffs’ post-judgment motion to vacate or modify the judgment and to grant them leave to amend their complaint.

The plaintiffs appealed

the dismissal and the denial of the post-judgment motion to the Supreme Court of the State of New York, Appellate Division, First Department, and the Company cross-appealed select rulings in the Court’s decision dismissing the action.

plaintiffs’ appeals and the Company’s cross-appeal were consolidated and argued on January 12, 2021.

On February 2, 2021, the Appellate Division issued its decision upholding the dismissal of the State Court Action with prejudice on statute of

limitations grounds.

The Plaintiffs did not appeal the Appellate Division decision.

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Briefing on the motion to dismiss was fully submitted on May 21, 2021, and that motion is currently pending before the Court.

On June 2, 2022, the Company was named as a defendant in a

putative class action filed in the United States District Court for the Southern District of Ohio captioned City of Miami General Employees’ & Sanitation Employees’ Retirement Trust v.

On June 2, 2022, the Company was named as a defendant in a putative class action filed in the United States District Court for the Southern District of Ohio

captioned City of Miami General Employees’ & Sanitation Employees’ Retirement Trust v.

2:22-cv-02371 (S.D.

Ohio), and on

July 28, 2022, the Company was named as a defendant in a putative class action filed in the United States District Court for the Southern District of New York captioned San Antonio Fire and Police Pension Fund v.

Ohio), and on July 28, 2022, the Company was named as a defendant in a putative class action filed in the United

States District Court for the Southern District of New York captioned San Antonio Fire and Police Pension Fund v.

Dentsply Sirona Inc.

1:22-cv-06339 (together, the “Securities Litigation”).

The complaints in the Securities Litigation are substantially similar and both allege that, during the period June 9, 2021 through May 9, 2022, the Company, Mr.

Casey Jr., the

Company’s former Chief Executive Officer, and Mr.

Jorge Gomez, the Company’s former Chief Financial Officer, violated United States securities laws by, among other things, making materially false and misleading statements or omissions, including

regarding the manner in which the Company recognizes revenue tied to distributor rebate and incentive programs.

No specific amounts of damages have been alleged in these

We will continue to incur legal fees in connection with these pending cases, including expenses for the reimbursement of legal fees of present and former officers and directors under indemnification obligations.

The expense of

continuing to defend such litigation may be significant.

We intend to defend these lawsuits vigorously, but there can be no assurance that we will be successful in any defense.

If any of the lawsuits are decided adversely, we may be liable for

significant damages directly or under our indemnification obligations, which could adversely affect our business, results of operations and cash flows.

At this stage, we are unable to assess whether any material loss or adverse effect is

reasonably possible as a result of these lawsuits or estimate the range of any potential loss.

As a result of an audit by the IRS for fiscal years 2012

through 2013, on February 11, 2019, the IRS issued to the Company a “30-day letter” and a Revenue Agent’s Report (“RAR”), relating to the Company’s worthless stock deduction in 2013 in the amount of $ 546 million.

The complaints in the Securities Litigation

are substantially similar and both allege that, during the period June 9, 2021 through May 9, 2022, the Company, Mr.

Casey Jr., the Company’s former Chief Executive Officer, and Mr.

Jorge Gomez, the Company’s former Chief Financial

Officer, violated United States securities laws by, among other things, making materially false and misleading statements or omissions, including regarding the manner in which the Company recognizes revenue tied to distributor rebate and

incentive programs.

No specific amounts of damages have been alleged in these lawsuits.

We will continue to incur legal fees in connection with these pending cases, including expenses for the reimbursement of legal fees

of present and former officers and directors under indemnification obligations.

The expense of continuing to defend such litigation may be significant.

We intend to defend these lawsuits vigorously, but there can be no assurance that we will be

successful in any defense.

If any of the lawsuits are decided adversely, we may be liable for significant damages directly or under our indemnification obligations, which could adversely affect our business, results of operations and cash flows.

this stage, we are unable to assess whether any material loss or adverse effect is reasonably possible as a result of these lawsuits or estimate the range of any potential loss.

As a result of an audit by the IRS for fiscal years 2012 through 2013, on February

11, 2019, the IRS issued to the Company a “30-day letter” and a Revenue Agent’s Report (“RAR”), relating to the Company’s worthless stock deduction in 2013 in the amount of $ 546 million.

The RAR disallows the deduction and, after adjusting the Company’s net operating loss carryforward, asserts that the Company is entitled to a refund of $ 5 million for 2012, has no tax

liability for 2013, and owes a deficiency of $ 17 million in tax for 2014, excluding interest.

In accordance with ASC 740, the Company

recorded the tax benefit associated with the worthless stock deduction in the Company’s 2012 financial statements.

In accordance with ASC 740, the Company recorded the tax benefit associated with the worthless stock deduction in the Company’s 2012

financial statements.

In March 2019, the Company submitted a formal protest disputing on multiple grounds the proposed taxes.

The Company and its

advisors discussed its position with the IRS Appeals Office Team on October 28, 2020 and, on November 13, 2020, submitted a supplemental response to questions raised by the Appeals Team.

The Company’s position continues to be reviewed by the IRS

Appeals Office team.

The Company believes the IRS’ position is without merit and believes that it is more likely-than-not the Company’s position will be sustained upon further review by the IRS Appeals Office Team.

The Company has not accrued a

liability relating to the proposed tax adjustments.

However, the outcome of this dispute involves a number of uncertainties, including those inherent in the valuation of various assets at the time of the worthless stock deduction, and those

relating to the application of the Internal Revenue Code and other federal income tax authorities and judicial precedent.

The Company and its advisors discussed its position with the IRS Appeals Office Team on October 28, 2020 and, on

November 13, 2020, submitted a supplemental response to questions raised by the Appeals Team.

The Company’s position continues to be reviewed by the IRS Appeals Office team.

The Company believes the IRS’ position is without merit and believes

that it is more likely-than-not the Company’s position will be sustained upon further review by the IRS Appeals Office Team.

The Company has not accrued a liability relating to the proposed tax adjustments.

However, the outcome of this dispute

involves a number of uncertainties, including those inherent in the valuation of various assets at the time of the worthless stock deduction, and those relating to the application of the Internal Revenue Code and other federal income tax

authorities and judicial precedent.

Accordingly, there can be no assurance that the dispute with the IRS will be resolved favorably.

If determined adversely,

the dispute would result in a current period charge to earnings and could have a material adverse effect in the consolidated results of operations, financial position, and liquidity of the Company.

If determined adversely, the dispute would result in a current period charge to earnings and could have a

material adverse effect in the consolidated results of operations, financial position, and liquidity of the Company.

The Swedish Tax Agency has disallowed certain of the Company’s interest expense

deductions for the tax years from 2013 to 2018.

If such interest expense deductions were disallowed, the Company would be subject to an additional $ 39 million

in tax expense.

If such interest expense deductions were disallowed, the Company would be subject to an additional $ 42

million in tax expense.

The Company has appealed the disallowance to the Swedish Administrative Court.

With respect to such deductions taken in the tax years from 2013 to 2014, the Court ruled against the Company on July 5, 2017.

On August 7, 2017, the

Company appealed the unfavorable decision of the Swedish Administrative Court.

2017, the Company appealed the unfavorable decision of the Swedish Administrative Court.

On November 5, 2018, the Company delivered its final argument to the Administrative Court of Appeals at a hearing.

The European Union Commission has taken the view

that Sweden’s interest deduction limitation rules are incompatible with European Union law and supporting legal opinions, and therefore the Company has not paid the tax or made provision in its financial statements for such potential expense.

The European Union Commission has taken

the view that Sweden’s interest deduction limitation rules are incompatible with European Union law and supporting legal opinions, and therefore the Company has not paid the tax or made provision in its financial statements for such potential

This view has now been confirmed by the European Union Court of Justice in a preliminary ruling requested by the Swedish Supreme Administrative Court.

Subsequently, the Swedish Tax Authority has conceded in pending court proceedings that the

Company should be granted further interest expense deductions, but still claims that interest expense deductions incurring a maximum additional tax expense of $ 7 million should be disallowed on grounds not relating to European Union law.

Subsequently, the Swedish Tax Authority has conceded in pending court proceedings that

the Company should be granted further interest expense deductions, but still claims that interest expense deductions incurring a maximum additional tax expense of $ 11 million should be disallowed on grounds not relating to European Union law.

The Company intends to vigorously defend its positions and pursue related appeals in

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consequential, as well as compensatory damages.

Except as otherwise noted, the Company generally cannot predict what the eventual outcome of the above-described pending matters will be, what the timing of the ultimate resolution of these matters

will be, or what the eventual loss, fines or penalties related to each pending matter may be.

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.

Except as otherwise noted, the Company cannot predict what the eventual outcome of the above-described pending matters will be, what the timing of the ultimate resolution of these matters will be,

or what the eventual loss, fines or penalties related to each pending matter may be.

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.

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

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long-term supply contracts for key components and raw materials.

At June 30, 2022, non-cancelable purchase commitments are as follows:

At March 31, 2022, non-cancelable purchase commitments are as follows:

(in millions)

The above information should be read in conjunction with Part II, Item 7 “Contractual Obligations” and Part II, Item 8, Note 22

“Commitments and Contingencies” in our 2021 Form 10-K/A for the fiscal year ended December 31, 2021.

The above information should be read in conjunction with Part II, Item 7 “Contractual Obligations” and

Part II, Item 8, Note 22 “Commitments and Contingencies” in our 2021 Form 10-K/A for the fiscal year ended December 31, 2021.

Off-Balance Sheet Arrangements

As of June 30, 2022, we had no material off-balance sheet arrangements that have, or

are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources other than certain items disclosed in the sections above.

As of March 31, 2022, we had no material off-balance sheet arrangements that have,

or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources other than certain items disclosed in the sections above.

Indemnification

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indemnification claims and the payments we have made under such agreements have not had a material effect on our results of operations, cash flows or financial position.

As of June 30, 2022, we did not have any material indemnification claims

As of March 31, 2022, we did not have any material indemnification claims

that were probable or reasonably possible.

1 unchanged sentence

flows in a particular period.

NOTE 16 – SUBSEQUENT

to the date of these interim unaudited consolidated financial statements but prior to issuance, the Company has continued to monitor macroeconomic events after its most recent annual goodwill impairment testing which was completed during the

second quarter ended June 30, 2022.

In the three months ended September 30, 2022, the Company expects to record a pre-tax non-cash charge for the impairment of goodwill and intangible assets in the range of $ 1.0 billion - $ 1.3 billion, due

primarily to macroeconomic factors such as higher cost of capital, cost inflation, unfavorable foreign currency impacts, and increased supply chain costs, which are contributing to reduced forecasted revenues, lower operating margins, and reduced

expectations for future cash flows.

DENTSPLY SIRONA Inc.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements