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GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended
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Jun. 30, 2025
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS 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 believes there is no indication that the carrying value more likely than not exceeds 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 include, 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 are 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 include, 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 premium equipment and implant products due partly to competitive pressure, which is contributing 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 June 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 during the course of the quarter and concluded there were no such indicators. However, following the impairments taken during the quarter, the fair values of certain indefinite-lived intangible assets within the Connected Technology Solutions and Orthodontic and Implant Solutions segments continued to approximate carrying values as of June 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. Remaining goodwill associated with the Implant & Prosthetic Solutions reporting unit was $376 million as of June 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 $109 million and $95 million, respectively, as of June 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 |  |  |  |  |  | — |  |  | — |  |  | (156) |  |  | — |  |  | (156) |
Foreign Currency Translation |  |  |  |  |  | — |  |  | 31 |  |  | 29 |  |  | 27 |  |  | 87 |
Balance at June 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  |  |  |  | $ | 291 |  |  | $ | 860 |  |  | $ | 1,305 |  |  | $ | 292 |  |  | $ | 2,748 |
Accumulated impairment losses |  |  |  |  |  | $ | (291) |  |  | $ | — |  |  | $ | (929) |  |  | $ | — |  |  | $ | (1,220) |
Goodwill, net at June 30, 2025 |  |  |  |  |  | $ | — |  |  | $ | 860 |  |  | $ | 376 |  |  | $ | 292 |  |  | $ | 1,528 |
Identifiable definite-lived and indefinite-lived intangible assets were as follows:
|  | June 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 |  | $ | 1,787 |  |  | $ | (1,263) |  |  | $ | 524 |  |  | $ | 1,639 |  |  | $ | (1,079) |  |  | $ | 560 |
Trade names and trademarks |  | 84 |  |  | (78) |  |  | 6 |  |  | 79 |  |  | (73) |  |  | 6 |
Licensing agreements |  | 44 |  |  | (30) |  |  | 14 |  |  | 29 |  |  | (28) |  |  | 1 |
Customer relationships |  | 1,102 |  |  | (813) |  |  | 289 |  |  | 1,019 |  |  | (716) |  |  | 303 |
Total definite-lived |  | 3,017 |  |  | (2,184) |  |  | 833 |  |  | 2,766 |  |  | (1,896) |  |  | 870 |
Indefinite-lived trade names and trademarks |  | $ | 295 |  |  | $ | — |  |  | $ | 295 |  |  | $ | 332 |  |  | $ | — |  |  | $ | 332 |
In-process R&D |  | 5 |  |  | — |  |  | 5 |  |  | 5 |  |  | — |  |  | 5 |
Total indefinite-lived |  | 300 |  |  | — |  |  | 300 |  |  | 337 |  |  | — |  |  | 337 |
Total identifiable intangible assets |  | $ | 3,317 |  |  | $ | (2,184) |  |  | $ | 1,133 |  |  | $ | 3,103 |  |  | $ | (1,896) |  |  | $ | 1,207 |
In the six months ended June 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.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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