DENTSPLY SIRONA Inc.

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We have recognized substantial goodwill and indefinite-lived intangible asset impairment charges, most recently in the quarter ended September 30, 2025, and may be required to recognize additional goodwill and indefinite-lived intangible asset impairment charges in the future.

Previous report

We have acquired other companies and intangible assets and may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangibles. We review amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. We test goodwill and indefinite-lived intangibles for impairment at least annually. The valuation models used to determine the fair value of goodwill or indefinite-lived intangible assets are dependent upon various assumptions and reflect management’s best estimates.

Previous report

The Company assessed the goodwill of its reporting units and its indefinite-lived intangible assets for impairment as of April 1, 2025. As a result of the Company’s April 1 impairment test, it was determined that the fair values of its Implant & Prosthetic Solutions reporting unit and 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 were below their carrying values.

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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, 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.

Previous report

As a result of the annual test of indefinite-lived intangible assets, the Company identified impairments of certain 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 these assets 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 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.

Previous report

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 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.

Previous report

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.

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The goodwill and indefinite-lived intangible asset impairment analyses are sensitive to changes in key assumptions used, such as discount rates, revenue growth rates, perpetual revenue growth rates, operating margin percentages, and net working capital assumptions of the business as well as current market conditions affecting the dental and medical device industries in both the United States and globally. Given the uncertainty in the marketplace and other factors affecting management’s assumptions underlying our discounted cash flow model, the assumptions and projections used in the analyses may not be realized and our current estimates could vary significantly in the future, which may result in one or more additional goodwill or indefinite-lived intangible asset impairment charges in the future.

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For further information on the annual impairment test of goodwill and intangible assets, see Note 13, Goodwill and Intangible Assets, in the Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

Previous report

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. Additionally, any such material impairment charges in future periods could result in violations of the Company’s current debt covenants. The Company is committed to maintaining compliance with its debt covenants in all material respects, including proactively seeking temporary or permanent amendments or waivers to avoid breaching such covenants.

Previous report

At September 30, 2025, following the above-mentioned impairments, the Company has $291 million of indefinite-lived intangible assets and $1.3 billion of goodwill recorded on its balance sheet. 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. Total net assets for this segment are $765 million as of September 30, 2025.