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SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Description of Business

DENTSPLY International Inc. (“DENTSPLY” or the “Company”), designs, develops, manufactures and markets a broad range of professional dental products. The Company believes that it is the world's leading manufacturer and distributor of dental prosthetics, endodontic instruments and materials, and ultrasonic scalers; the leading United States manufacturer and distributor of denture teeth, dental handpieces, dental x-ray film holders, film mounts and prophylaxis paste; and a leading worldwide manufacturer or distributor of dental injectable anesthetics, impression materials, orthodontic appliances, dental cutting instruments, dental implants and restorative dental materials, dental sealants, and crown and bridge materials. The Company distributes its dental products in over 120 countries under some of the most well established brand names in the industry.

DENTSPLY is committed to the development of innovative, high quality, cost effective products for the dental market.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company. The Company also consolidates all variable interest entities (“VIE”) where the Company has determined that it has the power to direct the activities that most significantly impact the VIE’s economic performance and shares in either the significant risks or rewards of the VIE. The Company continually reassesses its VIE to determine if consolidation is appropriate. All significant intercompany accounts and transactions are eliminated in consolidation.

Investments in nonconsolidated affiliates (20-50 percent owned companies, joint ventures and partnerships as well as less than 20 percent ownership positions where the Company maintains significant influence over the subsidiary) are accounted for using the equity method.

Cash and Cash Equivalents

Cash and cash equivalents include deposits with banks as well as highly liquid time deposits with maturities at the date of purchase of ninety days or less.

Short-term Investments

Short-term investments are highly liquid time deposits with original maturities at the date of purchase greater than ninety days and with remaining maturities of one year or less.

Accounts and Notes Receivable-Trade

The Company sells dental products through a worldwide network of distributors and directly to end users. For customers on credit terms, the Company performs ongoing credit evaluation of those customers' financial condition and generally does not require collateral from them. The Company establishes allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company records a provision for doubtful accounts, which is included in “Selling, general and administrative expenses.”

Accounts receivable – trade is stated net of these allowances that were $8.8 million and $12.2 million at December 31, 2010 and 2009, respectively. For the years ended December 31, 2010 and 2009, the Company wrote-off $2.6 million and $4.3 million, respectively, of accounts receivable that were previously reserved. The tighter credit markets caused the Company to reassess and tighten its controls over customer credit terms, increase collection efforts and analyze accounts receivable activity. This, along with improved customer liquidity, enabled the Company to reduce the provision for doubtful accounts by $0.2 million and $3.1 million in 2010 and 2009, respectively.

Additionally, notes receivable – trade is stated net of these allowances that were $0.8 million and $1.1 million at December 31, 2010 and 2009, respectively. The Company recorded provisions for doubtful accounts on notes receivable – trade of $0.7 million for 2010 and $0.5 million for 2009. Additionally, the Company wrote-off $1.0 million in 2010.

Inventories

Inventories are stated at the lower of cost or market. At December 31, 2010 and 2009, the cost of $6.9 million, or 2.2%, and $7.8 million, or 2.7%, respectively, of inventories was determined by the last in, first-out (“LIFO”) method. The cost of other inventories was determined by the first-in, first-out (“FIFO”) or average cost methods. The Company establishes reserves for inventory estimated to be obsolete or unmarketable equal to the difference between the cost of inventory and estimated market value based upon assumptions about future demand and market conditions.

If the FIFO method had been used to determine the cost of LIFO inventories, the amounts at which net inventories are stated would be higher than reported at December 31, 2010 and 2009 by $4.9 million and $4.0 million, respectively.

Valuation of Goodwill and Other Long-Lived Assets

Assessment of the potential impairment of goodwill and other long-lived assets is an integral part of the Company’s normal ongoing review of operations. Testing for potential impairment of these assets is significantly dependent on assumptions and reflects management’s best estimates at a particular point in time. The dynamic economic environments in which the Company’s businesses operate and key economic and business assumptions with respect to projected selling prices, increased competition and introductions of new technologies can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time at which such impairments are recognized. If there are unfavorable changes in these assumptions, the future cash flows, a key variable in assessing the impairment of these assets, may decrease and as a result the Company may be required to recognize impairment charges. Future changes in the environment and the economic outlook for the assets being evaluated could also result in additional impairment charges being recognized. The following information outlines the Company’s significant accounting policies on long-lived assets by type.

Goodwill

US GAAP requires that at least an annual impairment test be applied to goodwill. The Company performs impairment tests using a fair value approach. If impairment is identified on goodwill, the resulting charge is determined by recalculating goodwill through a hypothetical purchase price allocation of the fair value and reducing the current carrying value to the extent it exceeds the recalculated goodwill.

The Company’s fair value approach involves using a discounted cash flow model with market-based support as its valuation technique to measure the fair value for its reporting units. The discounted cash flow model uses five year forecasted cash flows plus a terminal value based on a multiple of earnings. In addition, the Company applies gross profit and operating expense assumptions consistent with its historical trends. The total cash flows were discounted based on market participant data, which included the Company’s weighted-average cost of capital. The Company considered the current market conditions when determining its assumptions. Lastly, the Company reconciled the aggregate fair values of its reporting units to its market capitalization, which included a reasonable control premium based on market conditions. Additional information related to the testing for goodwill impairment is provided in Note 8, Goodwill and Intangible Assets.

Identifiable Definite-Lived Intangible Assets

Identifiable definite-lived intangible assets, which primarily consist of patents, trademarks, brand names, non-compete agreements and licensing agreements, are amortized on a straight-line basis over their estimated useful lives. These assets are reviewed for impairment whenever events or circumstances suggest that the carrying amount of the asset may not be recoverable. The Company closely monitors certain intangible assets related to new and existing technologies for indicators of impairment as these assets have more risk of becoming impaired. Impairment is based upon an initial evaluation of the identifiable undiscounted cash flows. If the initial evaluation identifies a potential impairment, a fair value is determined by using a discounted cash flows valuation. If impaired, the resulting charge reflects the excess of the asset’s carrying cost over its fair value.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation. Except for leasehold improvements, depreciation for financial reporting purposes is computed by the straight-line method over the following estimated useful lives: buildings - generally 40 years and machinery and equipment - 4 to 15 years. The cost of leasehold improvements is amortized over the shorter of the estimated useful life or the term of the lease. Maintenance and repairs are expensed as incurred to the statement of operations; replacements and major improvements are capitalized. These assets groups are reviewed for impairment whenever events or circumstances suggest that the carrying amount of the asset group may not be recoverable. Impairment is based upon an evaluation of the identifiable undiscounted cash flows. If impaired, the resulting charge reflects the excess of the asset group’s carrying cost over its fair value.

Marketable Security

The Company’s marketable securities consist of debt instruments that are classified as available-for-sale in “Other noncurrent assets” on the consolidated balance sheets as the instruments mature in December 2015. The Company determined the appropriate classification at the time of purchase and will re-evaluate such designation as of each balance sheet date. In addition, the Company reviews the securities each quarter for indications of possible impairment. Once impairment is identified, the determination of whether the impairment is temporary or other-than-temporary requires significant judgment. The primary factors that the Company considers in classifying the impairment include the extent and time the fair value of each investment has been below cost and the existence of a credit loss. If a decline in fair value is judged other-than-temporary, the basis of the securities is written down to fair value and the amount of the write-down is included as a realized loss.

Derivative Financial Instruments

The Company requires that all derivative instruments be recorded on the balance sheet at fair value and that changes in fair value be recorded each period in current earnings or accumulated other comprehensive income (“AOCI”).

The Company employs derivative financial instruments to hedge certain anticipated transactions, firm commitments, and assets and liabilities denominated in foreign currencies. Additionally, the Company utilizes interest rate swaps to convert floating rate debt to fixed rate, fixed rate debt to floating rate, cross currency basis swaps to convert debt denominated in one currency to another currency, and commodity swaps to fix its variable raw materials costs.

Pension and Other Postretirement Benefits

Substantially all of the employees of the Company and its subsidiaries are covered by government or Company-sponsored defined benefit or defined contribution plans. Additionally, certain union and salaried employee groups in the United States are covered by postretirement healthcare plans. Costs for Company-sponsored plans are based on expected return on plan assets, discount rates, employee compensation increase rates and health care cost trends. Expected return on plan assets, discount rates and health care cost trend assumptions are particularly important when determining the Company’s benefit obligations and net periodic benefit costs associated with postretirement benefits. Changes in these assumptions can impact the Company’s earnings before income taxes. In determining the cost of postretirement benefits, certain assumptions are established annually to reflect market conditions and plan experience to appropriately reflect the expected costs as actuarially determined. These assumptions include medical inflation trend rates, discount rates, employee turnover and mortality rates. The Company predominantly uses liability durations in establishing its discount rates, which are observed from indices of high-grade corporate bond yields in the respective economic regions of the plans. The expected return on plan assets is the weighted average long-term expected return based upon asset allocations and historic average returns for the markets where the assets are invested, principally in foreign locations. The Company reports the funded status of its defined benefit pension and other postretirement benefit plans on its consolidated balance sheets as a net liability or asset. Additional information related to the impact of changes in these assumptions is provided in Note 13, Benefit Plans.

Accruals for Self-Insured Losses

The Company maintains insurance for certain risks, including workers’ compensation, general liability, product liability and vehicle liability, and is self-insured for employee related health care benefits. The Company accrues for the expected costs associated with these risks by considering historical claims experience, demographic factors, severity factors and other relevant information. Costs are recognized in the period the claim is incurred, and the financial statement accruals include an estimate of claims incurred but not yet reported. The Company has stop-loss coverage to limit its exposure to any significant exposure on a per claim basis.

Litigation

The Company and its subsidiaries are from time to time parties to lawsuits arising out of their respective operations. The Company records liabilities when a loss is probable and can be reasonably estimated. These estimates are typically in the form of ranges, and the Company records the liabilities at the low point of the ranges. The ranges established by management are based on an analysis made by internal and external legal counsel who considers information known at the time. If the Company determines a liability to be only reasonably possible, it considers the same information to estimate the possible exposure and disclose any material potential liability. These loss contingencies are monitored regularly for a change in fact or circumstance that would require an accrual adjustment. The Company believes it has estimated liabilities for probable losses well in the past; however, the unpredictability of litigation and court decisions could cause a liability to be incurred in excess of estimates. Legal costs related to these lawsuits are expensed as incurred.

Accumulated Other Comprehensive Income

AOCI includes foreign currency translation adjustments related to the Company’s foreign subsidiaries, net of the related changes in certain financial instruments hedging these foreign currency investments. In addition, changes in the Company’s fair value of certain derivative financial instruments, net unrealized holding gain on available-for-sale securities and pension liability adjustments and prior service costs, net are recorded in AOCI. These changes are recorded in AOCI net of any related tax adjustments. For the years ended December 31, 2010, 2009 and 2008, these tax adjustments were $158.7 million, $143.0 million and $138.5 million, respectively, primarily related to foreign currency translation adjustments.

The balances included in AOCI in the consolidated balance sheets are as follows:

	December 31,
(in thousands)	2010			2009

Foreign currency translation adjustments	$	170,597		$	220,116
Net loss on derivative financial instruments		(126,648	)		(113,800	)
Net unrealized holding gain on available for-sale securities		11,029			-
Pension liability adjustments		(30,822	)		(22,774	)
	$	24,156		$	83,542

The cumulative foreign currency translation adjustments included translation gains of $294.6 million and $327.8 million as of December 31, 2010 and 2009, respectively, offset by losses of $124.0 million and $107.7 million, respectively, on loans designated as hedges of net investments.

Foreign Currency Translation

The functional currency for foreign operations, except for those in highly inflationary economies, has been determined to be the local currency.

Assets and liabilities of foreign subsidiaries are translated at foreign exchange rates on the balance sheet date; revenue and expenses are translated at the average year-to-date foreign exchange rates. The effects of these translation adjustments are reported in Equity within AOCI of the consolidated balance sheets. During the year ended December 31, 2010, the Company had losses of $16.3 million on its loans designated as hedges of net investments and translation losses of $33.2 million. During the year ended December 31, 2009, the Company had gains of $0.9 million on its loans designated as hedges of net investments and translation gains of $49.7 million.

Foreign exchange gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved and remeasurement adjustments in countries with highly inflationary economies are included in income. Net foreign exchange losses of $3.3 million, net foreign exchange gains of $0.3 million and net foreign exchange losses of $8.9 million in 2010, 2009, and 2008, respectively, are included in “Other expense (income), net.”

Revenue Recognition

Revenue, net of related discounts and allowances, is recognized when the earnings process is complete. This occurs when products are shipped to or received by the customer in accordance with the terms of the agreement, title and risk of loss have been transferred, collectability is reasonably assured and pricing is fixed or determinable. Net sales include shipping and handling costs collected from customers in connection with the sale. Sales taxes, value added taxes and other similar types of taxes collected from customers in connection with the sale are recorded by the Company on a net basis and are not included in the statement of operations.

Certain of the Company’s customers are offered cash rebates based on targeted sales increases. In accounting for these rebate programs, the Company records an accrual as a reduction of net sales for the estimated rebate as sales take place throughout the year.

A portion of the Company’s net sales is comprised of sales of precious metals generated through its precious metal dental alloy product offerings. As the precious metal content of the Company’s sales is largely a pass-through to customers, the Company uses its cost of precious metal purchased as a proxy for the precious metal content of sales, as the precious metal content of sales is not separately tracked and invoiced to customers. The Company believes that it is reasonable to use the cost of precious metal content purchased in this manner since precious metal alloy sale prices are typically adjusted when the prices of underlying precious metals change. The precious metals content of sales was $189.2 million, $168.7 million and $200.0 million for 2010, 2009 and 2008, respectively.

Cost of Products Sold

Cost of products sold represents costs directly related to the manufacture and distribution of the Company’s products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling, warehousing and the depreciation of manufacturing, warehousing and distribution facilities. Overhead and related expenses include salaries, wages, employee benefits, utilities, lease costs, maintenance and property taxes.

Warranties

The Company provides warranties on certain equipment products. Estimated warranty costs are accrued when sales are made to customers. Estimates for warranty costs are based primarily on historical warranty claim experience. Warranty costs are included in “Cost of products sold.”

Selling, General and Administrative Expenses

Selling, general and administrative expenses represent costs incurred in generating revenues and in managing the business of the Company. Such costs include advertising and other marketing expenses, salaries, employee benefits, incentive compensation, research and development, travel, office expenses, lease costs, amortization of capitalized software and depreciation of administrative facilities.

Research and Development Costs

Research and development (“R&D”) costs relate primarily to internal costs for salaries and direct overhead expenses. In addition, the Company contracts with outside vendors to conduct R&D activities. All such R&D costs are charged to expense when incurred. The Company capitalizes the costs of equipment that have general R&D uses and expenses such equipment that is solely for specific R&D projects. The depreciation expense related to this capitalized equipment is included in the Company’s R&D costs. R&D costs are included in “Selling, general and administrative expenses” and amounted to $49.4 million, $50.3 million and $48.5 million for 2010, 2009 and 2008, respectively. The year-over-year comparisons for 2010 versus 2009 and 2009 versus 2008 were both impacted by foreign currency translation which decreased the reported expense variations.

Stock Compensation

The Company recognizes the compensation cost relating to share-based payment transactions in the financial statements. The cost of share-based payment transactions is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity awards). The compensation cost is only recognized for the portion of the awards that are expected to vest.

Income Taxes

The Company’s tax expense includes U.S. and international income taxes plus the provision for U.S. taxes on undistributed earnings of international subsidiaries not deemed to be permanently invested. Tax credits and other incentives reduce tax expense in the year the credits are claimed. Certain items of income and expense are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. Deferred tax assets are recognized if it is more likely than not that the assets will be realized in future years. The Company establishes a valuation allowance for deferred tax assets for which realization is not likely.

The Company applies a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company recognizes in the financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position.

Earnings Per Share

Basic earnings per share are calculated by dividing net earnings by the weighted average number of shares outstanding for the period. Diluted earnings per share is calculated by dividing net earnings by the weighted average number of shares outstanding for the period, adjusted for the effect of an assumed exercise of all dilutive options outstanding at the end of the period.

Business Acquisitions

The Company acquires businesses as well as partial interests in businesses. Acquired businesses are accounted for using the acquisition method of accounting which requires that the purchase price be allocated to net assets at their respective fair values. Any excess of the purchase price over estimated fair values of net assets is recorded as goodwill. Under the acquisition method, amounts allocated to acquired in-process research and development and contingent consideration are recorded to the consolidated balance sheet at the date of acquisition at their respective fair values. The assumptions made in determining fair value assigned to acquired assets and liabilities as well as asset lives can materially impact the results of operations.

The Company obtains information during due diligence and through other sources to get respective fair values. Examples of factors and information that the Company uses to determine the fair values include: tangible and intangible asset evaluations and appraisals; evaluations of existing contingencies and liabilities; product line integration information; and information systems compatibilities. If the initial accounting for an acquisition is incomplete by the end of the quarter in which the acquisition occurred, the Company will record a provisional estimate in the financial statements. The provisional estimate will be finalized as soon as information becomes available but will only occur up to one year from the acquisition date.

Equity Method Investments

Investments in partnerships, joint ventures and less-than-majority-owned subsidiaries in which the Company has significant influence are accounted for under the equity method.

Equity investments are carried at original cost adjusted for the proportionate share of the investees’ income, losses and distributions. The Company assesses the carrying value of its equity investments when an indicator of a loss in value is present and record a loss in value of the investment when the assessment indicates that an other-than-temporary decline in the investment exists.

The Company classifies its equity in net earnings of unconsolidated affiliates in the consolidated statements of operations under the title of “Equity in net loss of unconsolidated affiliated company”.

Noncontrolling Interests

The Company reports noncontrolling interest (“NCI”) in a subsidiary as a separate component of Equity in the consolidated balance sheets. Additionally, the Company reports the portion of net income and comprehensive income (loss) attributed to the Company and NCI separately in the consolidated statements of operations. The Company also includes a separate column for NCI in the consolidated statements of changes in equity and comprehensive income.

Variable Interest Entities

On January 1, 2010, the Company adopted the new accounting guidance for variable interest entities (“VIE”). The guidance includes: (1) the elimination of the exemption from consolidation for qualifying special purpose entities, (2) a new approach for determining the primary beneficiary of a VIE, which requires that the primary beneficiary have both (i) the power to control the most significant activities of the VIE and (ii) either the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, and (3) the requirement to continually reassess who should consolidate a VIE. The adoption did not have a material impact on the Company’s financial position and results of operations.

The Company consolidates all VIE where the Company has determined that it has the power to direct the activities that most significantly impact the VIE’s economic performance and shares in either the significant risks or rewards of the VIE. The Company continually reassesses VIE to determine if consolidation is appropriate. The Company continues to believe that it is the primary beneficiary of Materialise Dental N.V. (“Materialise”) and Zhermack S.p.A. (“Zhermack”) under this new accounting guidance for VIE. The accounting for Materialise and Zhermack are discussed further in Note 3, Business Acquisitions.

Segment Reporting

The Company has numerous operating businesses covering a wide range of products and geographic regions, primarily serving the professional dental market. Professional dental products represented approximately 97% of sales in 2010, 2009 and 2008. The Company has four reportable segments and a description of the activities of these segments is included in Note 4, Segment and Geographic Information.

Fair Value Measurement

Recurring Basis

The Company records certain financial assets and liabilities at fair value in accordance with the accounting guidance, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring financial instruments at fair value. The three broad levels defined by the fair value hierarchy are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

Level 2 – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data.

Level 3 – Instruments that have little to no pricing observability as of the reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

The degree of judgment utilized in measuring the fair value of certain financial assets and liabilities generally correlates to the level of pricing observability. Pricing observability is impacted by a number of factors, including the type of financial instrument. Financial assets and liabilities with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, financial assets and liabilities rarely traded or not quoted will generally have less, or no pricing observability and a higher degree of judgment utilized in measuring fair value.

The Company primarily applies the market approach for recurring fair value measurements and endeavors to utilize the best available information. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Additionally, the Company considers its credit risks and its counterparties' credit risks when determining the fair values of its financial assets and liabilities. The Company has presented the required disclosures in Note 16, Fair Value Measurement.

Non-Recurring Basis

When events or circumstances require an asset or liability to be fair valued that otherwise is generally recorded based on another valuation method, such as, net realizable value, the Company will utilize the valuation techniques described above.

Reclassification of Prior Year Amounts

Certain reclassifications have been made to prior years' data in order to conform to current year presentation.

EARNINGS PER COMMON SHARE

12 Months Ended

Dec. 31, 2010

EARNINGS PER COMMON SHARE

NOTE 2 - EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per common share:

	Net income
	attributable to
	DENTSPLY				Earnings per
(in thousands, except for share amounts)	International		Shares		common share
Year Ended December 31, 2010
Basic	$	265,708		143,980	$	1.85
Incremental shares from assumed exercise of dilutive options		- -		2,005

Diluted	$	265,708		145,985	$	1.82

Year Ended December 31, 2009
Basic	$	274,258		148,319	$	1.85
Incremental shares from assumed exercise of dilutive options		- -		1,783

Diluted	$	274,258		150,102	$	1.83

Year Ended December 31, 2008
Basic	$	283,869		149,069	$	1.90
Incremental shares from assumed exercise of dilutive options		- -		2,610

Diluted	$	283,869		151,679	$	1.87

Options to purchase 3.1 million, 2.9 million and 1.6 million shares of common stock that were outstanding during the years ended 2010, 2009 and 2008, respectively, were not included in the computation of diluted earnings per common share since the options' exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive.

BUSINESS ACQUISITIONS AND INVESTMENTS IN AFFILIATES

12 Months Ended

Dec. 31, 2010

BUSINESS ACQUISITIONS AND INVESTMENTS IN AFFILIATES

NOTE 3 - BUSINESS ACQUISITIONS AND INVESTMENTS IN AFFILIATES

During 2010, the acquisition related activity was $35.6 million, net of cash acquired, which included a payment for a non-controlling interest investment in DIO Corporation (“DIO”). In 2009, the acquisition related activity was $3.0 million, net of cash. This activity was related to an additional earn-out payment on a prior acquisition from 2007 and the acquisition of a small sales and marketing organization of 3D digital implantology products.

Investment in Affiliates

On December 9, 2010, the Company purchased an initial ownership interest of 16% of the outstanding shares of DIO. The Company accounts for the ownership in DIO under the equity method of accounting as it has significant influence over DIO. In addition, on December 9, 2010, the Company invested $49.7 million in the corporate convertible bonds of DIO, which may be converted into commons shares after a one year period. The bonds are designated by the Company as available-for-sale securities which are reported in, “Other noncurrent assets, net,” on the consolidated balance sheets and the changes in fair value are reported in AOCI. The convertible feature of the bond has not been bifurcated from the underlying bond as the feature does not contain a net-settlement feature, nor would the Company be able to achieve a hypothetical net-settlement that would substantially place the Company in a comparable cash settlement position. As such, the derivative is not accounted for separately from the bond. The cash paid by the Company is equal to the face value of the bonds issued by DIO, and therefore, the Company has not recorded any bond premium or discount on acquiring the bonds. At December 31, 2010, the amortized cost and fair value of the DIO bond was $49.7 million and $66.0 million, respectively, and $11.0 million of unrealized holding gains on available-for-sale securities, net of tax, have been recorded in AOCI. The contractual maturity of the bond is in December 2015.

DIO is located in Busan, South Korea and manufactures a wide range of dental implants including STEADY®, BioTite-H, SM implant, internal implant, external implant, ProTem implant, and SM Extra Wide implant systems. In addition, DIO offers various dental devices including implant surgical devices, handpieces, dental materials, impression materials sterilizers, toothpaste that contains dyrdoxyapatite, and the iTero® 3D intra-oral scanner (Cadent Inc.).

Business Acquisitions

The business acquisitions were related to the purchase of several small distributors that sell dental specialty products. The purchase agreements for three of the acquisitions provide for additional payments to be made based upon the achievement of certain operating performance of the respective businesses; however, the Company does not expect the additional payments to be material to the financial statements. The results of operations for these businesses have been included in the accompanying financial statements since the effective date of the respective transactions. The purchase prices have been allocated on the basis of preliminary estimates of the fair values of assets acquired and liabilities assumed.

Variable Interest Entities

The Company adopted new accounting guidance for VIE on January 1, 2010, which is discussed in Note 1, Significant Accounting Policies. The Company continues to believe that it will be the primary beneficiary of Materialise and Zhermack under this accounting guidance for VIE.

Additional Earn-out Payments

Several of the Company’s 2005, 2007 and 2008 acquisitions included provisions for possible additional payments based on the future performance of the individual businesses (generally for two to three years). During 2010, the Company paid $5.1 million in additional purchase price under these agreements.

Fair Value Allocations for the Business Acquisitions and Additional Earnout Payments

As of December 31, 2010, the Company has recorded a total of $20.4 million in goodwill related to four business combinations, one investment in an unconsolidated affiliate, and additional earn-out payments on acquisitions from prior years. None of this goodwill is expected to be deductible for tax purposes.

The following table summarizes the estimated fair values of the indentified assets acquired and liabilities assumed (in thousands):

Current assets	$	10,755
Property, plant and equipment		1,255
Identifiable intangible assets and goodwill		21,055
Other long-term assets		28
Total assets	$	33,093
Current liabilities		(12,495	)
Long-term liabilities		(1,283	)
Total liabilities	$	(13,778	)
Net assets	$	19,315

Also, as a result of the finalization of fair values assigned to assets acquired and liabilities assumed from 2010 acquisition related activity, the Company has recorded a total of $0.7 million in intangible assets as non-compete agreements and customer lists with an average weighted life of 5.0 years.

Goodwill was assigned to the following four segments:

•	$1.5 million to U.S., Germany, and Certain Other European Regions Consumable Businesses;

•	$12.7 million Canada/Latin America/Endodontics/Orthodontics; and,

•	$6.2 million to Dental Laboratory Business/Implants/Non-Dental.

SEGMENT AND GEOGRAPHIC INFORMATION

12 Months Ended

Dec. 31, 2010

SEGMENT AND GEOGRAPHIC INFORMATION

NOTE 4 – SEGMENT AND GEOGRAPHIC INFORMATION

The operating businesses are combined into operating groups, which have overlapping product offerings, geographical presence, customer bases, distribution channels and regulatory oversight. These operating groups are considered the Company’s reportable segments as the Company’s chief operating decision-maker regularly reviews financial results at the operating group level and uses this information to manage the Company’s operations. The accounting policies of the segments are consistent with those described for the consolidated financial statements in the summary of significant accounting policies (see Note 1, Significant Accounting Policies). The Company measures segment income for reporting purposes as net operating income before restructuring, impairments, and other costs, interest and taxes. Additionally, net operating income is derived from net third party sales, excluding precious metal content. A description of the services provided within each of the Company’s four reportable segments is provided below. The disclosure below reflects the Company’s segment reporting structure.

In January 2010, the Company moved the reporting responsibility for several locations between segments as a result of a change to the management structure. This change also helped the Company gain operating efficiencies and effectiveness. The segment information below reflects this revised structure for all periods shown.

United States, Germany and Certain Other European Regions Consumable Businesses

This business group includes responsibility for the design, manufacturing, sales and distribution of certain small equipment and chairside consumable products in the United States, Germany and certain other European regions. It also has responsibility for the sales and distribution of certain Endodontic products in Germany.

France, United Kingdom, Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses

This business group includes responsibility for the sales and distribution for certain small equipment, chairside consumable products, certain laboratory products and certain Endodontic products in France, United Kingdom, Italy, the Commonwealth of Independent States (“CIS”), Middle East, Africa, Asia (excluding Japan), Japan and Australia, as well as the sale and distribution of implant products and bone substitute/grafting materials in France, Italy, Asia and Australia. This business group also includes the responsibility for sales and distribution for certain laboratory products, implants products and bone substitution/grafting materials for Austria. It also is responsible for sales and distribution of certain small equipment and chairside consumable products, certain laboratory products, implant products and bone substation/grafting materials in certain other European countries. In addition this business group also includes the manufacturing and sale of Orthodontic products and certain laboratory products in Japan, and the manufacturing of certain laboratory and certain Endodontic products in Asia.

Canada/Latin America/Endodontics/Orthodontics

This business group includes responsibility for the design, manufacture, and/or sales and distribution of certain small equipment, chairside consumable products, certain laboratory products and Endodontic products in Brazil. It also has responsibility for the sales and distribution of most of the Company’s dental products sold in Latin America and Canada. This business group also includes the responsibility for the design and manufacturing of Endodontic products in the United States, Switzerland and Germany and is responsible for the sales and distribution of the Company’s Endodontic products in the United States, Canada, Switzerland, Benelux, Scandinavia, Austria, Latin America and Eastern Europe, and for certain Endodontic products in Germany. This business group is also responsible for the world-wide sales and distribution, excluding Japan, as well as some manufacturing of the Company’s Orthodontic products. In addition, this business group is also responsible for sales and distribution in the United States of implant and bone substitute/grafting materials and the sales and distribution of implants in Brazil. This business group is also responsible for the manufacture and sale of certain products in the Company’s non-dental business.

Dental Laboratory Business/Implants/Non-Dental

This business group includes the responsibility for the design, manufacture, sales and distribution of most laboratory products, excluding certain countries mentioned previously, and the design, manufacture, and/or sales and distribution of the Company’s dental implant products and bone substitute/grafting materials, excluding sales and distribution of implants and bone substitute/grafting materials in the United States; France, Italy, Austria, and certain other Eastern European countries; and Australia. This business group is also responsible for most of the Company’s non-dental business.

Significant interdependencies exist among the Company’s operations in certain geographic areas. Inter-group sales are at prices intended to provide a reasonable profit to the manufacturing unit after recovery of all manufacturing costs and to provide a reasonable profit for purchasing locations after coverage of marketing, sales, distribution and general and administrative costs.

Generally, the Company evaluates performance of the operating groups based on the groups’ operating income, excluding restructuring, impairments and other costs, interest and taxes, and net third party sales, excluding precious metal content. The Company considers net third party sales, excluding precious metal content, as the appropriate sales measurement due to the fluctuations of precious metal prices and due to the fact that the precious metal content is largely a pass-through to customers and has a minimal effect on earnings.

The following table sets forth information about the Company’s operating groups for the years ended December 31, 2010, 2009 and 2008.

Third Party Net Sales

(in thousands)	2010			2009			2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	526,781		$	526,668		$	459,678

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		482,146			471,232			487,126

Canada/Latin America/Endodontics/
Orthodontics		665,032			621,256			632,151

Dental Laboratory Business/
Implants/Non-Dental		550,359			543,637			618,077

All Other (a)		(3,304	)		(3,415	)		(5,567	)
Total net sales	$	2,221,014		$	2,159,378		$	2,191,465

(a)

Includes amounts recorded at Corporate headquarters.

Third Party Net Sales, Excluding Precious Metal Content

(in thousands)	2010			2009			2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	526,781		$	526,668		$	459,678

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		445,627			436,790			456,192

Canada/Latin America/Endodontics/
Orthodontics		662,556			618,414			628,887

Dental Laboratory Business/
Implants/Non-Dental		400,097			412,209			452,352

All Other (b)		(3,304	)		(3,415	)		(5,567	)
Total net sales, excluding precious metal content	$	2,031,757		$	1,990,666		$	1,991,542
Precious metal content of sales		189,257			168,712			199,923
Total net sales, including precious metal content	$	2,221,014		$	2,159,378		$	2,191,465

(b)

Includes results of Corporate headquarters and one distribution warehouse not managed by named segments.

Intersegment Net Sales

(in thousands)	2010			2009			2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	116,440		$	104,328		$	130,463

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		17,103			13,202			15,941

Canada/Latin America/Endodontics/
Orthodontics		115,158			103,329			106,031

Dental Laboratory Business/
Implants/Non-Dental		112,285			114,591			123,157

All Other (c)		179,780			176,539			177,251
Eliminations		(540,766	)		(511,989	)		(552,843	)
Total	$	- -		$	- -		$	- -

(c)

Includes amounts recorded at Corporate headquarters.

Depreciation and Amortization

(in thousands)	2010		2009		2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	16,315	$	14,945	$	12,807

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		3,939		3,884		3,188

Canada/Latin America/Endodontics/
Orthodontics		18,419		16,978		17,179

Dental Laboratory Business/
Implants/Non-Dental		20,479		21,461		16,062

All Other (d)		7,188		7,907		7,693
Total	$	66,340	$	65,175	$	56,929

(d)

Includes amounts recorded at Corporate headquarters.

Segment Operating Income

(in thousands)	2010			2009			2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	176,128		$	158,389		$	162,717

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		17,187			19,737			14,474

Canada/Latin America/Endodontics/
Orthodontics		195,817			185,772			200,101

Dental Laboratory Business/
Implants/Non-Dental		83,428			92,554			123,442

All Other (e)		(81,303	)		(68,319	)		(87,918	)
Segment Operating Income	$	391,257		$	388,133		$	412,816

Reconciling Items:
Restructuring and other costs		10,984			6,890			32,355
Interest expense		25,089			21,896			32,527
Interest income		(4,254	)		(5,032	)		(17,089	)
Other expense (income), net		1,782			1,023			10,150
Income before income taxes	$	357,656		$	363,356		$	354,873

(e)

Includes results of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments.

Capital Expenditures

(in thousands)	2010		2009		2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	9,267	$	8,333	$	19,836

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		2,978		2,506		3,839

Canada/Latin America/Endodontics/
Orthodontics		17,078		14,434		19,593

Dental Laboratory Business/
Implants/Non-Dental		11,397		25,546		24,510

All Other (f)		3,516		5,662		8,662
Total	$	44,236	$	56,481	$	76,440

(f)

Includes capital expenditures of Corporate headquarters.

Assets

(in thousands)	2010		2009

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	578,770	$	602,272

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		390,572		388,831

Canada/Latin America/Endodontics/
Orthodontics		932,126		809,924

Dental Laboratory Business/
Implants/Non-Dental		995,090		973,764

All Other (g)		361,393		313,141
Total	$	3,257,951	$	3,087,932

(g)

Includes assets of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments.

Geographic Information

The following table sets forth information about the Company's operations in different geographic areas for the years ended December 31, 2010, 2009 and 2008. Net sales reported below represent revenues for shipments made by operating businesses located in the country or territory identified, including export sales. Assets reported represent those held by the operating businesses located in the respective geographic areas.

	United				Other
(in thousands)	States		Germany		Foreign		Consolidated

2010
Net sales	$	841,232	$	469,796	$	909,986	$	2,221,014
Long-lived assets		119,533		116,916		186,656		423,105

2009
Net sales	$	843,349	$	482,130	$	833,899	$	2,159,378
Long-lived assets		124,129		132,348		183,143		439,620

2008
Net sales	$	865,743	$	470,836	$	854,886	$	2,191,465
Long-lived assets		129,286		131,960		171,029		432,275

Product and Customer Information

The following table presents net sales information by product category:

	December 31,
(in thousands)	2010		2009		2008

Dental consumables products	$	717,718	$	708,713	$	677,758
Dental laboratory products		511,061		504,526		558,291
Dental specialty products		925,317		892,421		888,484
Non-dental products		66,918		53,718		66,932
Total net sales	$	2,221,014	$	2,159,378	$	2,191,465

Dental consumable products consist of dental sundries and small equipment products used in dental offices for the treatment of patients. DENTSPLY’s products in this category include dental anesthetics, infection control products, prophylaxis paste, dental sealants, impression materials, restorative materials, bone grafting materials, tooth whiteners and topical fluoride. The Company manufactures thousands of different consumable products marketed under more than a hundred brand names. Small equipment products consist of various durable goods used in dental offices for treatment of patients. DENTSPLY’s small equipment products include high and low speed handpieces, intraoral curing light systems and ultrasonic scalers and polishers.

Dental laboratory products are used in dental laboratories in the preparation of dental appliances. DENTSPLY’s products in this category include dental prosthetics, including artificial teeth, precious metal dental alloys, dental ceramics, crown and bridge materials, and equipment products used in laboratories consisting of computer aided machining (CAM) ceramic systems and porcelain furnaces.

Dental specialty products are specialized treatment products used within the dental office and laboratory settings. DENTSPLY’s products in this category include endodontic (root canal) instruments and materials, implants and related products, bone grafting material, 3D digital implantology, and orthodontic appliances and accessories.

Non-dental products are comprised primarily of investment casting materials that are used in the production of jewelry, golf club heads and other casting products, as well as certain medical products.

One customer, Henry Schein, Incorporated, a dental distributor, accounted for more than ten percent of consolidated net sales in 2010, 2009 and 2008 accounting for 11% of all net sales. Third party export sales from the U.S. are less than ten percent of consolidated net sales.

OTHER EXPENSE (INCOME), NET

12 Months Ended

Dec. 31, 2010

OTHER EXPENSE (INCOME), NET

NOTE 5 – OTHER EXPENSE (INCOME), NET

Other expense (income), net, consists of the following:

	December 31,
(in thousands)	2010			2009		2008

Foreign exchange transaction losses (gains), net	$	3,331		$	336	$	8,881
Other (income) expense, net		(1,549	)		687		1,269
	$	1,782		$	1,023	$	10,150

INVENTORIES, NET

12 Months Ended

Dec. 31, 2010

INVENTORIES, NET

NOTE 6 – INVENTORIES, NET

Inventories, net, consist of the following:

	December 31,
(in thousands)	2010		2009

Finished goods	$	189,343	$	178,721
Work-in-process		57,272		53,056
Raw materials and supplies		62,123		59,863
	$	308,738	$	291,640

The Company’s inventory valuation reserve was $35.5 million for 2010 and $31.9 million for 2009.

PROPERTY, PLANT AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2010

PROPERTY, PLANT AND EQUIPMENT, NET

NOTE 7- PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net, consist of the following:

	December 31,
(in thousands)	2010		2009
Assets, at cost:
Land	$	40,032	$	43,207
Buildings and improvements		304,341		295,297
Machinery and equipment		576,704		546,806
Construction in progress		20,639		18,610
		941,716		903,920
Less: Accumulated depreciation		518,611		464,301
Property, plant and equipment, net	$	423,105	$	439,619

GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2010

GOODWILL AND INTANGIBLE ASSETS

NOTE 8 – GOODWILL AND INTANGIBLE ASSETS

The Company requires that impairment tests on goodwill or other indefinite-lived intangible assets be performed annually and are based upon a fair value approach. If goodwill impairment is identified, the resulting charge is calculating the implied goodwill through a hypothetical purchase price allocation of the fair value and reducing the current carrying value to the extent it exceeds the implied goodwill. If impairment is identified on indefinite-lived intangibles, the resulting charge reflects the excess of the asset’s carrying cost over its fair value. Other intangible assets with finite lives are amortized over their useful lives and tested for impairment when events or changes in circumstances indicate that the finite-lived intangible assets may be impaired

In addition to minimum annual impairment tests, the Company also requires that impairment assessments be made more frequently if events or changes in circumstances indicate that the goodwill or indefinite-lived intangible assets might be impaired. As the Company learns of such changes in circumstances through periodic analysis of actual results or through the annual development of operating unit business plans in the fourth quarter of each year, for example, impairment assessments will be performed as necessary.

The Company performs its annual goodwill impairment test in the second quarter of each year. This impairment assessment includes an evaluation of various reporting units, which is an operating segment or one reporting level below the operating segment. The Company compares the fair value of each reporting unit to its carrying amount to determine if there is potential goodwill impairment. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill of the reporting unit is less than the carrying value of its goodwill.

The Company performed the required annual impairment tests of goodwill as of April 30, 2010 on seven reporting units. To determine the fair value of the Company’s reporting units, the Company uses a discounted cash flow model with market-based support as its valuation technique to measure the fair value for its reporting units. The discounted cash flow model uses five year forecasted cash flows plus a terminal value based on a multiple of earnings. In addition, the Company applies gross margin and operating expense assumptions consistent with historical trends. The total cash flows were discounted based on a range between 7% to 10%, which included assumptions regarding the Company’s weighted-average cost of capital. The Company considered the current market conditions when determining its assumptions as the global economy, and to a certain extent the U.S. economy, began to stabilize from the recessionary conditions in 2009. Lastly, the Company reconciled the aggregated fair values of its reporting units to its market capitalization, which included a reasonable control premium based on market conditions. As a result of the annual impairment tests of goodwill, no impairment was identified.

As of December 31, 2010, the Company has assigned no value to indefinite-lived intangible assets. Impairments of identifiable definite-lived intangible assets for the years ended December 31, 2010, 2009 and 2008 were $0.4 million, $0.3 million and $2.7 million, respectively.

The table below presents the net carrying values of goodwill and identifiable definite-lived intangible assets.

	December 31,
(in thousands)	2010		2009

Goodwill	$	1,303,055	$	1,312,596

Identifiable definite-lived intangible assets, net	$	78,743	$	89,086

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

	December 31,
(in thousands)	2010			2009

Balance, beginning of the year	$	1,312,596		$	1,277,026
Acquisition activity		20,382			3,572
Changes to purchase price allocations		-			5,245
Effects of exchange rate changes		(29,923	)		26,753
Balance, end of the year	$	1,303,055		$	1,312,596

The change in the net carrying value of goodwill from 2009 to 2010 was due to foreign currency translation adjustments, additional payments based on the performance of the previously acquired businesses and changes to purchase price allocations. The purchase price allocation changes were primarily related to the finalization of the purchase price allocation on 2009 acquisitions.

Goodwill by reportable segment is as follows:

	December 31,
(in thousands)	2010		2009

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	249,522	$	252,538

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		167,258		159,383

Canada/Latin America/Endodontics/
Orthodontics		282,321		267,427

Dental Laboratory Business/
Implants/Non-Dental		603,954		633,248

Total	$	1,303,055	$	1,312,596

Identifiable definite-lived intangible assets consist of the following:

	December 31, 2010							December 31, 2009
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
(in thousands)	Amount		Amortization			Amount		Amount		Amortization			Amount

Patents	$	21,956	$	(12,108	)	$	9,848	$	38,840	$	(25,842	)	$	12,998
Trademarks		68,344		(20,835	)		47,509		70,353		(17,939	)		52,414
Licensing agreements		28,509		(15,709	)		12,800		28,880		(14,138	)		14,742
Other		16,994		(8,408	)		8,586		15,364		(6,432	)		8,932
	$	135,803	$	(57,060	)	$	78,743	$	153,437	$	(64,351	)	$	89,086

Amortization expense for identifiable definite-lived intangible assets for 2010, 2009 and 2008 was $9.0 million, $10.6 million and $8.7 million, respectively. The annual estimated amortization expense related to these intangible assets for each of the five succeeding fiscal years is $8.4 million, $7.7 million, $6.3 million, $5.6 million and $5.5 million for 2011, 2012, 2013, 2014 and 2015, respectively.

ACCRUED LIABILITIES

12 Months Ended

Dec. 31, 2010

ACCRUED LIABILITIES

NOTE 9 - ACCRUED LIABILITIES

Accrued liabilities consist of the following:

	December 31,
(in thousands)	2010		2009

Payroll, commissions, bonuses, other cash compensation and employee benefits	$	61,334	$	60,083
General insurance		12,118		13,222
Sales and marketing programs		31,070		28,468
Professional and legal costs		10,844		10,248
Restructuring costs		9,191		9,966
Warranty liabilities		4,253		4,141
Deferred income		5,656		3,385
Accrued vacation and holidays		12,528		13,425
Third party royalties		9,184		9,806
Current portion of derivatives		27,668		59,250
Other		40,899		37,175
	$	224,745	$	249,169

A reconciliation of changes in the Company's warranty liability for 2010 and 2009 is as follows:

	December 31,
(in thousands)	2010			2009

Balance, beginning of the year	$	4,141		$	4,260
Accruals for warranties issued during the year		1,581			1,129
Accruals related to pre-existing warranties		103			-
Warranty settlements made during the year		(1,494	)		(1,295	)
Effects of exchange rate changes		(78	)		47
Balance, end of the year	$	4,253		$	4,141

FINANCING ARRANGEMENTS

12 Months Ended

Dec. 31, 2010

FINANCING ARRANGEMENTS

NOTE 10 - FINANCING ARRANGEMENTS

Financing Activities

On February 19, 2010, the Company received the proceeds of a $250.0 million Private Placement Note (“PPN”) at a fixed rate of 4.1% for an average term of five years and a final maturity of six years. The PPN is unsecured and contains certain affirmative and negative covenants relating to its operations and financial condition of the Company similar in substance to the $150.0 million U.S. Private Placement Note that matured March 15, 2010.

On March 1, 2010, the Company entered into a Term Loan Agreement (“Term Loan”) with PNC Bank providing for the issuance by the Company of 65.0 million Swiss francs aggregate principal amount of floating rate Senior Term Loan with a final maturity in March 2012. This Term Loan is unsecured and contains certain affirmative and negative covenants relating to its operations and financial condition of the Company similar in substance to the existing multi-currency revolving credit agreement maturing May 7, 2013. The new Term Loan was used to refinance a loan under the existing multi-currency revolving credit agreement.

On May 7, 2010, the Company entered into a $200.0 million multi-currency revolving credit agreement (“Revolver”) with a syndicate of eight lenders with a final maturity in May 2013. The multi-currency revolving credit agreement replaced the $500.0 million multi-currency revolving credit agreement which matured May 9, 2010. This Revolver is unsecured and contains certain affirmative and negative covenants relating to its operations and financial condition of the Company similar in substance to the previous multi-currency revolving credit agreement which matured May 9, 2010.

Short-Term Borrowings

Short-term bank borrowings amounted to $5.3 million and $15.6 million at December 31, 2010 and 2009, respectively. The weighted-average interest rates of these borrowings were 3.0% at December 31, 2010 and 2009. Unused lines of credit for short-term financing at December 31, 2010 and 2009 were $72.1 million and $56.9 million, respectively. Substantially all other short-term borrowings were classified as long-term as of December 31, 2010 and 2009, reflecting the Company's intent and ability to refinance these obligations beyond one year and are included in the following table. The unused lines of credit have no major restrictions and are provided under demand notes between the Company and the lending institution. Interest is charged on borrowings under these lines of credit at various rates, generally below prime or equivalent money rates.

Long-Term Borrowings

	December 31,
(in thousands)	2010		2009

Multi-currency revolving credit agreement expiring May 2013:
U.S. dollar denominated	$	2,123	$	3,967
Swiss francs 65 million		-		62,844
Private placement notes:
U.S. dollar denominated expiring March 2010 at 0.55%		-		150,000
U.S. dollar denominated expiring March 2016 at 4.11%		250,000		-
Term Loan Agreement:
Swiss francs denominated expiring March 2012 at 1.67%		69,560		-
Term Loan Agreement:
Japanese yen denominated expiring March 2012 at 0.91%		154,626		134,776
U.S. dollar commercial paper:
Facility rated A/2-P/2 U.S. dollar borrowings at 0.40%		119,500		85,200
Other borrowings, various currencies and rates		10,684		16,944
	$	606,493	$	453,731
Less: Current portion
(included in notes payable and current portion of long-term debt)		2,478		66,580
Long-term portion	$	604,015	$	387,151

The table below reflects the contractual maturity dates of the various borrowings at December 31, 2010. The borrowings under the commercial paper program are considered contractually due in 2013.

(in thousands)

2011	$	2,478
2012		159,459
2013		192,497
2014		75,718
2015		100,330
2016 and beyond		76,011
	$	606,493

The Company utilizes interest rate swaps to convert the Swiss franc denominated Term Loan debt to fixed rate debt. The Company utilizes interest rate swaps to convert the variable rate Japanese yen denominated notes to fixed rate debt. The Company's use of interest rate swaps is further described in Note 15, Financial Instruments and Derivatives.

The Company has a $200.0 million revolving credit agreement with participation from eight banks, which expires in May 2013. The revolving credit agreement contains a number of covenants and two financial ratios, which the Company is required to satisfy. The most restrictive of these covenants pertain to asset dispositions and prescribed ratios of indebtedness to total capital and operating income excluding depreciation and amortization to interest expense. Any breach of any such covenants or restrictions would result in a default under the existing borrowing documentation that would permit the lenders to declare all borrowings under such documentation to be immediately due and payable and, through cross default provisions, would entitle the Company's other lenders to accelerate their loans. At December 31, 2010, the Company was in compliance with these covenants. The Company pays a facility fee of 0.25% annually on the amount of the commitment under the $200.0 million three-year facility. Interest rates on amounts borrowed under the facility will depend on the maturity of the borrowing, the currency borrowed, the interest rate option selected, and the Company’s long-term credit rating from Standard and Poor’s and Moody’s.

The Company has a U.S. dollar commercial paper facility totaling $200.0 million, which has utilization, dealer and annual appraisal fees which on average cost 0.16% annually. The $200.0 million revolving credit facility acts as back-up credit to this commercial paper facility. The total available credit under the commercial paper facility and the revolving credit facility is $200.0 million. As of December 31, 2010, the Company had $119.5 million outstanding in commercial paper and $2.1 million in revolving credit obligations.

At December 31, 2010, the Company had total unused lines of credit, including lines available under its short-term arrangements and revolving credit agreement, of $150.5 million.

EQUITY

12 Months Ended

Dec. 31, 2010

EQUITY

NOTE 11 - EQUITY

At December 31, 2010, the Company had authorization to repurchase shares under its stock repurchase program in an amount up to 22,000,000 shares of treasury stock. Under its stock repurchase program, the Company purchased 6,714,508 shares and 2,452,903 shares during 2010 and 2009 at an average price of $33.36 and $32.09, respectively. As of December 31, 2010 and 2009, the Company held 21.0 million and 15.8 million shares of treasury stock, respectively. During 2010, the Company repurchased $224.0 million in treasury stock. The Company also received proceeds of $30.2 million primarily as a result of the exercise of 1.5 million stock options during the year ended December 31, 2010. It is the Company’s practice to issue shares from treasury stock when options are exercised. The tax benefit realized for the options exercised during the year ended December 31, 2010 is $5.4 million.

The following table represents total outstanding shares for the years ended December 31:

	Common		Treasury			Outstanding
(in thousands)	Shares		Shares			Shares

Balance at December 31, 2007		162,776		(11,954	)		150,822
Shares Issued		-		677			677
Repurchase of common stock at cost		- -		(2,971	)		(2,971	)

Balance at December 31, 2008		162,776		(14,248	)		148,528
Shares Issued		-		886			886
Repurchase of common stock at cost		- -		(2,453	)		(2,453	)

Balance at December 31, 2009		162,776		(15,815	)		146,961
Shares Issued		-		1,489			1,489
Repurchase of common stock at cost		- -		(6,715	)		(6,715	)

Balance at December 31, 2010		162,776		(21,041	)		141,735

The Company maintains the 2010 Equity Incentive Plan (the “Plan”) under which it may grant non-qualified stock options, incentive stock options, restricted stock, restricted stock units (“RSU”) and stock appreciation rights, collectively referred to as “Awards.” Awards are granted at exercise prices that are equal to the closing stock price on the date of grant. The Company authorized grants under the Plan of 13.0 million shares of common stock, plus any unexercised portion of cancelled or terminated stock options granted under the DENTSPLY International Inc. 2002 Equity Incentive Plan, as amended, subject to adjustment as follows: each January, if 7% of the total outstanding common shares of the Company exceed 13.0 million, the excess becomes available for grant under the Plan. No more than 2.5 million shares may be awarded as restricted stock and RSU, and no key employee may be granted restricted stock and RSU in excess of approximately 0.2 million shares of common stock in any calendar year. The number of shares available for grant under the 2010 Plan as of December 31, 2010 is 13.8 million.

Stock options generally expire ten years after the date of grant under these plans and grants become exercisable over a period of three years after the date of grant at the rate of one-third per year, except when they become immediately exercisable upon death, disability or qualified retirement. RSU vest 100% on the third anniversary of the date of grant and are subject to a service condition, which requires grantees to remain employed by the Company during the three-year period following the date of grant. In addition to the service condition, certain key executives are subject to performance requirements. Similar to stock options, RSU become immediately exercisable upon death, disability or qualified retirement. The fair value of each RSU assumes that performance goals will be achieved. If such goals are not met, no compensation cost is recognized and any recognized compensation costs is reversed. Under the terms of the RSU, the three-year period is referred to as the restricted period. RSU and the rights under the award may not be sold, assigned, transferred, donated, pledged or otherwise disposed of during the three year restricted period prior to vesting. Upon the expiration of the applicable restricted period and the satisfaction of all conditions imposed, all restrictions imposed on RSU will lapse, and one share of common stock will be issued as payment for each vested RSU.

The following table represents total stock based compensation expense and the tax related benefit for the years ended:

	December 31,
(in millions)	2010		2009		2008

Stock option expense	$	10.4	$	8.7	$	11.7
RSU expense		7.2		6.4		4.4
Total stock based compensation expense	$	17.6	$	15.1	$	16.1

Related deferred income tax benefit	$	4.9	$	3.6	$	3.9

The stock option expense shown in the preceding table represents the aggregate fair value of shares vested during the year ended December 31, 2010, 2009 and 2008. There were 1.8 million non-qualified stock options unvested as of December 31, 2010. The remaining unamortized compensation cost related to non-qualified stock options is $8.9 million, which will be expensed over the weighted average remaining vesting period of the options, or 1.4 years. The unamortized compensation cost related to RSU is $6.9 million, which will be expensed over the remaining weighted average restricted period of the RSU, or 1.2 years.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of each option awarded. The following table sets forth the assumptions used to determine compensation cost for the Company’s non-qualified stock options (“NQSO”) issued during the years ended:

	December 31,
	2010 (a)			2009			2008
Weighted average fair value per share	$	9.06		$	7.31		$	5.23
Expected dividend yield		0.58	%		0.60	%		0.69	%
Risk-free interest rate		2.55	%		2.14	%		1.85	%
Expected volatility		22	%		22	%		21	%
Expected life (years)		6.42			4.84			4.66

(a)

In 2010, the Human Resources Committee of the Company’s Board of Directors reviewed the Company’s practices for NQSO grants and determined that it would be more appropriate to make all regular equity grants in the February time frame, after the Company’s financial results are known for the prior year. Accordingly, there were no grants of NQSO in December 2010, which had been the historic practice.

The total intrinsic value of options exercised for the years ended December 31, 2010, 2009 and 2008 was $16.5 million, $12.3 million and $13.7 million, respectively.

The following table summarizes the non-qualified stock option transactions for the year ended December 31, 2010:

	Outstanding							Exercisable
				Weighted						Weighted
				Average		Aggregate				Average		Aggregate
				Exercise		Intrinsic				Exercise		Intrinsic
(in thousands, except per share amounts)	Shares			Price		Value		Shares		Price		Value
December 31, 2009		12,038		$	28.34	$	94,148		8,682	$	26.78	$	80,839
Granted		150			34.56
Exercised		(1,344	)		22.46
Forfeited		(208	)		33.15

December 31, 2010		10,636		$	29.07	$	66,722		8,815	$	28.58	$	61,450

The weighted average remaining contractual term of all outstanding options is 5.8 years and the weighted average remaining contractual term of exercisable options is 5.1 years.

The following table summarizes information about non-qualified stock options outstanding for the year ended December 31, 2010:

	Outstanding						Exercisable
			Weighted
	Number		Average				Number
	Outstanding		Remaining		Weighted		Exercisable		Weighted
	at		Contractual		Average		at		Average
Incremental Changes	December 31,		Life		Exercise		December 31,		Exercise
in Stock Price	2010		(in years)		Price		2010		Price
10.01 - - 15.00		30,600		0.5	$	13.61		30,600	$	13.61
15.01 - - 20.00		1,165,283		1.6		17.64		1,165,283		17.64
20.01 - - 25.00		1,037,798		3.1		22.17		1,019,398		22.17
25.01 - - 30.00		4,270,074		6.1		27.07		3,681,669		27.18
30.01 - - 35.00		2,844,220		7.6		32.81		1,749,067		32.19
35.01 - - 40.00		203,315		7.8		36.77		93,764		37.29
40.01 - - 45.00		37,774		7.2		41.16		28,587		41.19
45.01 - - 50.00		1,046,867		6.8		45.15		1,046,867		45.15

		10,635,931		5.8	$	29.07		8,815,235	$	28.58

The following table summarizes the unvested RSU transactions for the year ended December 31, 2010:

	Unvested Restricted Stock Units
				Weighted Average
(in thousands, except per share amounts)				Grant Date
	Shares			Fair Value
Unvested at December 31, 2009		668		$	31.95
Granted		250			32.92
Exercised		(144	)		30.95
Forfeited		(30	)		32.86

Unvested at December 31, 2010		744		$	32.43

INCOME TAXES

12 Months Ended

Dec. 31, 2010

INCOME TAXES

NOTE 12 - INCOME TAXES

The components of income before income taxes from operations are as follows:

	December 31,
(in thousands)	2010		2009		2008

United States	$	104,424	$	99,009	$	45,171
Foreign		253,232		264,347		309,702
	$	357,656	$	363,356	$	354,873

The components of the provision for income taxes from operations are as follows:

	December 31,
(in thousands)	2010			2009			2008

Current:
U.S. federal	$	21,848		$	30,851		$	(9,913	)
U.S. state		3,795			5,886			2,291
Foreign		62,196			52,012			65,854
Total	$	87,839		$	88,749		$	58,232

Deferred:
U.S. federal	$	3,067		$	(8,046	)	$	23,496
U.S. state		1,062			(476	)		3,283
Foreign		(2,743	)		8,717			(13,408	)
Total	$	1,386		$	195		$	13,371

	$	89,225		$	88,944		$	71,603

The reconciliation of the U.S. federal statutory tax rate to the effective rate for the years ended is as follows:

	December 31,
	2010			2009			2008

Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
Effect of:
State income taxes, net of federal benefit		0.9			1.0			1.0
Federal benefit of R&D and foreign tax credits		(6.9	)		(11.3	)		(15.8	)
Tax effect of international operations		(4.7	)		0.7			4.9
Net effect of tax audit activity		1.0			(1.3	)		(4.4	)
Tax effect of enacted statutory rate changes		-			-			0.1
Federal tax on unremitted earnings of certain
foreign subsidiaries		0.2			0.1			(0.3	)
Other		(0.5	)		0.3			(0.3	)

Effective income tax rate on operations		25.0	%		24.5	%		20.2	%

The tax effect of significant temporary differences giving rise to deferred tax assets and liabilities are as follows:

	December 31, 2010					December 31, 2009
	Deferred			Deferred		Deferred			Deferred
	Tax			Tax		Tax			Tax
(in thousands)	Asset			Liability		Asset			Liability

Commission and bonus accrual	$	1,201		$	-	$	1,764		$	-
Employee benefit accruals		33,139			-		27,876			-
Inventory		17,497			-		15,554			-
Identifiable intangible assets		-			138,621		-			130,419
Insurance premium accruals		4,610			-		5,068			-
Miscellaneous accruals		7,088			-		8,529			-
Other		13,820			-		12,827			-
Unrealized losses included in other
comprehensive income		59,618			-		55,545			-
Property, plant and equipment		-			36,881		-			38,663
Product warranty accruals		901			-		980			-
R&D and foreign tax credit carryforward		34,844			-		35,609			-
Restructuring and other cost accruals		1,011			-		777			-
Sales and marketing accrual		4,545			-		4,553			-
Taxes on unremitted earnings of foreign subsidiaries		-			2,083		-			1,486
Tax loss carryforwards and other tax attributes		94,286			-		70,010			-
Valuation allowance		(75,392	)		- -		(51,809	)		- -
	$	197,168		$	177,585	$	187,283		$	170,568

The deferred tax assets and liabilities are included in the following consolidated balance sheet line items:

	December 31,
(in thousands)	2010		2009

Prepaid expenses and other current assets	$	55,747	$	77,277
Income taxes payable		3,004		1,747
Other noncurrent assets		39,329		13,709
Deferred income taxes		72,489		72,524

The Company has $34.8 million of foreign tax credit carryforwards, of which $7.8 million, $7.1 million, $9.9 million, $7.1 million, and $2.9 million will expire in 2015, 2016, 2017, 2019, and 2020 respectively.

Certain foreign and domestic subsidiaries of the Company have tax loss carryforwards of $585.7 million at December 31, 2010, of which $443.1 million expire through 2030 and $142.6 million may be carried forward indefinitely. The tax benefit of certain tax loss carryforwards and deferred tax assets has been offset by a valuation allowance as of December 31, 2010, because it is uncertain whether the benefits will be realized in the future. The valuation allowance at December 31, 2010 and 2009 was $75.4 million and $51.8 million, respectively.

The Company has provided federal income taxes on certain undistributed earnings of its foreign subsidiaries that the Company anticipates will be repatriated. Deferred federal income taxes have not been provided on $800.1 million of cumulative earnings of foreign subsidiaries that the Company has determined to be permanently reinvested. It is not practicable to estimate the amount of tax that might be payable on these permanently reinvested earnings.

Tax Contingencies

The total amount of gross unrecognized tax benefits at December 31, 2010, is approximately $19.2 million, of this total, approximately $17.8 million represents the amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate. It is reasonably possible that certain amounts of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date of the Company’s consolidated financial statements. Final settlement and resolution of outstanding tax matters in various jurisdictions during the next twelve months could include unrecognized tax benefits of approximately $3.1 million. In addition, expiration of statutes of limitation in various jurisdictions during the next twelve months could include unrecognized tax benefits of approximately $0.3 million.

The total amount of accrued interest and penalties were $6.0 million and $5.6 million as of December 31, 2010 and 2009, respectively. The Company has consistently classified interest and penalties recognized in its consolidated financial statements as income taxes based on the accounting policy election of the Company. During the year ended December 31, 2010 and December 31, 2009, the Company recognized income tax benefits in the amount of $0.6 million and $1.7 million for interest and penalties. During the year ended December 31, 2008, the company recognized income tax expense of $5.5 million in interest and penalties.

The Company is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. The significant jurisdictions include the U.S., Germany and Switzerland. The Company has substantially concluded all U.S. federal income tax matters for years through 2005, resulting in the years 2006 through 2009 being subject to future potential tax audit adjustments while years prior to 2006 are settled. The Company has concluded audits in Germany through the tax year 2003 and is currently under audit for the years 2004 through 2008. The taxable years that remain open for Switzerland are 2000 through 2009.

The Company had the following activity recorded for unrecognized tax benefits:

	December 31,
(in thousands)	2010			2009			2008

Unrecognized tax benefits at beginning of period	$	12,864		$	17,285		$	36,307
Gross change for prior period positions		47			(5,120	)		(10,154	)
Gross change for current year positions		1,036			1,630			785
Decrease due to settlements and payments		-			(255	)		(2,584	)
Decrease due to statute expirations		(424	)		(1,026	)		(5,752	)
Increase due to effect of foreign currency translation		-			350			-
Decrease due to effect from foreign currency translation		(380	)		- -			(1,317	)

Unrecognized tax benefits at end of period	$	13,143		$	12,864		$	17,285

BENEFIT PLANS

12 Months Ended

Dec. 31, 2010

BENEFIT PLANS

NOTE 13 - BENEFIT PLANS

Substantially all of the employees of the Company and its subsidiaries are covered by government or Company-sponsored benefit plans. Total costs for Company-sponsored defined benefit, defined contribution and employee stock ownership plans amounted to $26.2 million, $24.6 million and $21.2 million in 2010, 2009 and 2008, respectively.

Defined Contribution Plans

The DENTSPLY Employee Stock Ownership Plan (“ESOP”) and 401(k) plans are designed to have contribution allocations of “Covered Compensation,” with a targeted 3% going into the ESOP in Company stock and a targeted 3% going into the 401(k) as a Non-Elective Contribution (“NEC”) in cash. The Company sponsors an employee 401(k) savings plan for its U.S. workforce to which enrolled participants may contribute up to Internal Revenue Service (“IRS”) defined limits. The annual expense and cash contribution to the 401(k) is expected to be $4.7 million for 2010 (to be contributed in the first quarter of 2011), and was $5.3 million for 2009 (contributed in the first quarter of 2010), and $5.0 million for 2008 (contributed in the first quarter of 2009).

The ESOP is a non-contributory defined contribution plan that covers substantially all of the U.S. based non-union employees of the Company. Contributions to the ESOP, net of forfeitures, are expected to be $3.0 million for 2010 (to be contributed in the first quarter of 2011), and were $1.4 million for 2009 (contributed in the first quarter of 2010), and were $1.3 million for 2008 (contributed in the first quarter of 2009).

All future ESOP allocations will come from a combination of forfeited shares and shares acquired in the open market. The Company has targeted future ESOP allocations at 3% of “Covered Compensation.” The share allocation will be accounted at fair value at the point of allocation, which is normally year-end.

Defined Benefit Plans

The Company maintains a number of separate contributory and non-contributory qualified defined benefit pension plans and other postretirement medical plans for certain union and salaried employee groups in the U.S. Pension benefits for salaried plans are based on salary and years of service; hourly plans are based on negotiated benefits and years of service. Annual contributions to the pension plans are sufficient to satisfy minimum funding requirements. Pension plan assets are held in trust and consist mainly of common stock and fixed income investments. The U.S. plans are funded in excess of the funding required by the U.S. Department of Labor.

In addition to the U.S. plans, the Company maintains defined benefit pension plans for its employees in Germany, Japan, the Netherlands, Switzerland and Taiwan. These plans provide benefits based upon age, years of service and remuneration. Substantially all of the German plans are unfunded book reserve plans. Other foreign plans are not significant individually or in the aggregate. Most employees and retirees outside the U.S. are covered by government health plans.

Defined Benefit Pension Plan Assets

The primary investment strategy is to ensure that the assets of the plans, along with anticipated future contributions, will be invested in order that the benefit entitlements of employees, pensioners and beneficiaries covered under the plan can be met when due with high probability. Pension plan assets consist mainly of common stock and fixed income investments. The target allocations for plan assets are 30% to 65% equity securities, 30% to 65% fixed income securities, 0% to 15% real estate, and 0% to 25% in all other types of investments. Equity securities include investments in companies located both in and outside the U.S. Equity securities do not include common stock of the Company. Fixed income securities include corporate bonds of companies from diversified industries, government bonds, mortgage notes and pledge letters. Other types of investments include investments in mutual funds, common trusts, insurance contracts, hedge funds and real estate. These plan assets are not recorded on the Company’s consolidated balance sheet as they are held in trust or other off-balance sheet investment vehicles.

The defined benefit pension plan assets in the U.S. are held in trust and the investment policies of the plans are generally to invest the plans assets in equities and fixed income investments. The objective is to achieve a long-term rate of return in excess of 5% while at the same time mitigating the impact of investment risk associated with investment categories that are expected to yield greater than average returns. In accordance with the investment policies of the U.S. plans, the plans assets were invested in the following investment categories: interest-bearing cash, registered investment companies (e.g. mutual funds), common/collective trusts, master trust investment accounts and insurance company general accounts. The investment objective is for assets to be invested in a manner consistent with the fiduciary standards of the Employee Retirement Income Security Act of 1974 (“ERISA”).

The defined benefit pension plan assets maintained in Germany, Japan, the Netherlands, Switzerland and Taiwan all have separate investment policies but generally have an objective to achieve a long-term rate of return in excess 5% while at the same time mitigating the impact of investment risk associated with investment categories that are expected to yield greater than average returns. In accordance with the investment policies for the plans outside the U.S., the plans’ assets were invested in the following investment categories: interest-bearing cash, U.S. and foreign equities, foreign fixed income securities (primarily corporate and government bonds), insurance company contracts, real estate and hedge funds.

Postretirement Healthcare

The plans for postretirement healthcare have no plan assets. The postretirement healthcare plans cover certain union and salaried employee groups in the U.S. and is contributory, with retiree contributions adjusted annually to limit the Company’s contribution for participants who retired after June 1, 1985. The Company also sponsors unfunded non-contributory postretirement medical plans for a limited number of union employees and their spouses and retirees of a discontinued operation.

Reconciliations of changes in the defined benefit and postretirement healthcare plans’ benefit obligations, fair value of assets and statement of funded status are as follows:

							Other Postretirement
	Pension Benefits						Benefits
	December 31,						December 31,
(in thousands)	2010			2009			2010			2009

Change in Benefit Obligation
Benefit obligation at beginning of year	$	191,976		$	183,785		$	11,666		$	10,501
Service cost		8,108			8,375			58			50
Interest cost		8,415			8,003			605			676
Participant contributions		2,886			2,774			616			689
Actuarial losses (gains)		7,976			(7,202	)		(548	)		1,018
Amendments		-			(29	)		-			-
Divestitures		291			286			-			-
Effects of exchange rate changes		3,474			4,929			-			-
Settlement gains		-			(808	)		-			-
Benefits paid		(11,622	)		(8,137	)		(790	)		(1,268	)

Benefit obligation at end of year	$	211,504		$	191,976		$	11,607		$	11,666

Change in Plan Assets
Fair value of plan assets at beginning of year	$	88,866		$	75,986		$	-		$	-
Actual return on assets		1,883			5,687			-			-
Settlement gains		-			-			-			-
Effects of exchange rate changes		8,374			2,474			-			-
Employer contributions		9,159			10,082			174			579
Participant contributions		2,886			2,774			616			689
Benefits paid		(11,622	)		(8,137	)		(790	)		(1,268	)
Fair value of plan assets at end of year	$	99,546		$	88,866		$	- -		$	- -

Funded status at end of year	$	(111,958	)	$	(103,110	)	$	(11,607	)	$	(11,666	)

The amounts recognized in the accompanying consolidated balance sheets, net of tax effects, are as follows:

							Other Postretirement
	Pension Benefits						Benefits
	December 31,						December 31,
(in thousands)	2010			2009			2010			2009

Other noncurrent assets	$	-		$	1		$	-		$	-
Deferred tax asset		9,834			7,177			1,113			1,427
Total assets	$	9,834		$	7,178		$	1,113		$	1,427

Current liabilities		(3,462	)		(3,604	)		(1,099	)		(1,107	)
Long-term liabilities		(108,496	)		(99,507	)		(10,508	)		(10,559	)
Deferred tax liability		(22	)		(238	)		- -			- -
Total liabilities	$	(111,980	)	$	(103,349	)	$	(11,607	)	$	(11,666	)

Accumulated other comprehensive income		29,050			20,504			1,771			2,270

Net amount recognized	$	(73,096	)	$	(75,667	)	$	(8,723	)	$	(7,969	)

Amounts recognized in AOCI consist of:

					Other Postretirement
	Pension Benefits				Benefits
	December 31,				December 31,
(in thousands)	2010		2009		2010		2009

Net actuarial loss	$	38,694	$	27,056	$	2,884	$	3,697
Net prior service cost		168		262		-		-
Net transition obligation		- -		125		- -		- -
Pretax AOCI	$	38,862	$	27,443	$	2,884	$	3,697
Less deferred taxes		9,812		6,939		1,113		1,427
Post tax AOCI	$	29,050	$	20,504	$	1,771	$	2,270

Information for pension plans with an accumulated benefit obligation in excess of plan assets:

	December 31,
(in thousands)	2010		2009

Projected benefit obligation	$	211,504	$	191,785
Accumulated benefit obligation		200,574		182,594
Fair value of plan assets		99,546		88,674

Components of net periodic benefit cost:

										Other Postretirement
	Pension Benefits									Benefits
(in thousands)	2010			2009			2008			2010		2009		2008

Service cost	$	8,108		$	8,375		$	6,980		$	58	$	50	$	50
Interest cost		8,415			8,003			7,910			605		676		635
Expected return on assets		(4,662	)		(3,991	)		(4,458	)		-		-		-
Amortization of actuarial losses		124			240			240			-		-		-
Amortization of prior service		86			138			141			-		-		-
Amortization of net loss		1,002			1,652			155			265		281		168
Settlement gains		- -			(1,148	)		(2,259	)		- -		- -		- -
Net periodic benefit cost	$	13,073		$	13,269		$	8,709		$	928	$	1,007	$	853

Other changes in plan assets and benefit obligations recognized in AOCI:

										Other Postretirement
	Pension Benefits									Benefits
(in thousands)	2010			2009			2008			2010			2009			2008

Net actuarial (gain) loss	$	12,640		$	(7,994	)	$	26,214		$	(548	)	$	1,020		$	670
Net prior service (credit)		(8	)		(37	)		(3	)		-			-			-
Net transition obligation		(1	)		1			32			-			-			-
Amortization		(1,212	)		(2,030	)		(536	)		(265	)		(281	)		(168	)
Total recognized in AOCI	$	11,419		$	(10,060	)	$	25,707		$	(813	)	$	739		$	502
Total recognized in net periodic benefit cost and AOCI	$	24,493		$	3,209		$	34,416		$	114		$	1,746		$	1,355

The estimated net loss, prior service cost and transition obligation for the defined benefit plans that will be amortized from AOCI into net periodic benefit cost over the next fiscal year are $1.6 million. The estimated net loss and prior service credit for the other postretirement plans that will be amortized from AOCI into net periodic benefit cost over the next fiscal year is $0.2 million.

The amounts in AOCI that are expected to be amortized as net expense (income) during fiscal year 2011 are as follows:

			Other
	Pension		Postretirement
(in thousands)	Benefits		Benefits

Amount of net transition obligation (asset)	$	-	$	-
Amount of net prior service cost		0.1		-
Amount of net loss		1.5		0.2

The weighted average assumptions used to determine benefit obligations for the Company's plans, principally in foreign locations, are as follows:

										Other Postretirement
	Pension Benefits									Benefits
	2010			2009			2008			2010			2009			2008
Discount rate		4.1	%		4.7	%		4.5	%		5.0	%		5.5	%		6.3	%
Rate of compensation increase		2.6	%		2.7	%		2.7	%		n/a			n/a			n/a
Health care cost trend		n/a			n/a			n/a			8.0	%		8.5	%		9.0	%
Ultimate health care cost trend		n/a			n/a			n/a			5.0	%		5.0	%		5.0	%
Years until ultimate trend is reached		n/a			n/a			n/a			7.0			8.0			9.0

The weighted average assumptions used to determine net periodic benefit cost for the Company's plans, principally in foreign locations, are as follows:

										Other Postretirement
	Pension Benefits									Benefits
	2010			2009			2008			2010			2009			2008
Discount rate		4.7	%		4.5	%		5.0	%		5.5	%		6.3	%		6.3	%
Expected return on plan assets		5.2	%		5.2	%		5.4	%		n/a			n/a			n/a
Rate of compensation increase		2.7	%		2.7	%		2.8	%		n/a			n/a			n/a
Health care cost trend		n/a			n/a			n/a			8.0	%		8.5	%		9.0	%
Ultimate health care cost trend		n/a			n/a			n/a			5.0	%		5.0	%		5.0	%
Years until ultimate trend is reached		n/a			n/a			n/a			7.0			8.0			9.0

Measurement Date	12/31/2010			12/31/2009			12/31/2008			12/31/2010			12/31/2009			12/31/2008

To develop the assumptions for the expected long-term rate of return on assets, the Company considered the current level of expected returns on risk free investments (primarily government bonds), the historical level of the risk premium associated with the other asset classes in which the assets are invested and the expectations for future returns of each asset class. The expected return for each asset class was then weighted based on the target asset allocations to develop the assumptions for the expected long-term rate of return on assets.

Assumed health care cost trend rates have an impact on the amounts reported for postretirement benefits. A one percentage point change in assumed healthcare cost trend rates would have the following effects for the year ended December 31, 2010:

	Other Postretirement
	Benefits
(in thousands)	1% Increase		1% Decrease

Effect on total of service and interest cost components	$	59	$	(49	)
Effect on postretirement benefit obligation		988		(845	)

Fair Value Measurements of Plan Assets

The fair value of the Company's pension plan assets at December 31, 2010 are presented in the table below by asset category. Over 80% of the total plan assets are categorized as Level 1, and therefore, the values assigned to these pension assets are based on quoted prices available in active markets. For the other category levels, a description of the valuation is provided in Note 1, Significant Accounting Policies, under the “fair value measurement” heading.

	December 31, 2010
(in thousands)	Total		Level 1		Level 2		Level 3
Assets Category
Cash and cash equivalents	$	3,028	$	2,775	$	253	$	-
Equity securities:
U. S.		1,103		1,103		-		-
International		29,944		29,944		-		-
Fixed income securities:
Fixed rate bonds (a)		41,215		41,215		-		-
Other types of investments:
Mutual funds (b)		8,857		417		8,440		-
Common trusts (c)		1,648		-		-		1,648
Insurance contracts		4,858		-		3,034		1,824
Hedge funds		1,334		-		-		1,334
Real estate		7,559		7,199		- -		360
Total	$	99,546	$	82,653	$	11,727	$	5,166

	December 31, 2009
(in thousands)	Total		Level 1		Level 2		Level 3
Assets Category
Cash and cash equivalents	$	3,180	$	3,038	$	142	$	-
Equity securities:
U. S.		954		954		-		-
International		27,907		27,907		-		-
Fixed income securities:
Fixed rate bonds (a)		35,350		35,350		-		-
Other types of investments:
Mutual funds (b)		7,872		-		7,872		-
Common trusts (c)		1,932		90		-		1,842
Insurance contracts		4,567		-		2,825		1,742
Hedge funds		1,672		-		-		1,672
Real estate		5,432		5,107		- -		325
Total	$	88,866	$	72,446	$	10,839	$	5,581

(a)	This category includes fixed income securities invested primarily in Swiss bonds, foreign bonds in Swiss currency, foreign currency bonds, mortgage notes and pledged letters.

(b)	Mutual funds balanced between moderate-income generation and moderate capital appreciation with investments allocation of approximately 50% equities and 50% fixed income investments.

(c)	This category includes common/collective funds with investments in approximately 65% equities and 35% in fixed income investments.

The following tables provide a reconciliation from December 31, 2009 to December 31, 2010 for the plans assets categorized as Level 3. No assets were transferred in or out of the Level 3 category during the year ended December 31, 2010.

	Changes within Level 3 Category for
	Year Ended December 31, 2010
	Common			Insurance			Hedge			Real
(in thousands)	Trust			Contracts			Funds			Estate		Total
Beginning balance at December 31, 2009	$	1,842		$	1,742		$	1,672		$	325	$	5,581

Actual return on plan assets:
Relating to assets still held at the reporting date		116			29			37			-		182
Relating to assets sold during the period		46			-			-			-		46
Purchases, sales and settlements		(356	)		109			(541	)		-		(788	)
Effects of exchange rate changes		-			(56	)		166			35		145
Ending balance at December 31, 2010	$	1,648		$	1,824		$	1,334		$	360	$	5,166

The following tables provide a reconciliation from December 31, 2008 to December 31, 2009 for the plans assets categorized as Level 3. No assets were transferred in or out of the Level 3 category during the year ended December 31, 2009.

	Changes within Level 3 Category for
	Year Ended December 31, 2009
	Common		Insurance		Hedge			Real
(in thousands)	Trust		Contracts		Funds			Estate		Total
Beginning balance at December 31, 2008	$	1,233	$	1,578	$	1,002		$	314	$	4,127

Actual return on plan assets:
Relating to assets still held at the reporting date		239		31		(224	)		-		46
Relating to assets sold during the period		16		-		-			-		16
Purchases, sales and settlements		354		89		832			-		1,275
Effects of exchange rate changes		- -		44		62			11		117
Ending balance at December 31, 2009	$	1,842	$	1,742	$	1,672		$	325	$	5,581

Fair values for Level 3 assets are determined as follows:

Common Trusts and Hedge Funds: The investments are valued using the net asset value provided by the administrator of the trust or fund, which is based on the fair value of the underlying securities.

Real Estate: Investment is stated by its appraised value.

Insurance Contracts: The value of the asset represents the mathematical reserve of the insurance policies and is calculated by the insurance firms using their own assumptions.

Cash Flows

In 2011, the Company expects to contribute $6.2 million to its defined benefit pension plans and $1.1 million to its postretirement medical plans.

Estimated Future Benefit Payments

(in thousands)	Pension Benefits		Other Postretirement Benefits
2011	$	8,368	$	1,099
2012		8,656		1,124
2013		9,569		1,080
2014		10,140		1,046
2015		10,058		978
2016-2019		59,982		4,149

RESTRUCTURING AND OTHER COSTS

12 Months Ended

Dec. 31, 2010

RESTRUCTURING AND OTHER COSTS

NOTE 14 – RESTRUCTURING AND OTHER COSTS

Restructuring Costs

Restructuring costs of $5.8 million and $5.9 million for 2010 and 2009, respectively, are reflected in Restructuring and other costs in the statement of operations and the associated liabilities are recorded in accrued liabilities and other non-current liabilities in the consolidated balance sheet. These costs consist of employee severance benefits, payments due under operating contracts, and other restructuring costs. These costs consist of employee severance benefits, payments due under operating contracts, and other restructuring costs. During 2010 and 2009, the Company initiated several restructuring plans primarily related to the closure and/or consolidation of certain production and selling facilities in the United States, Europe and South America to better leverage the Company’s resources by reducing costs and obtaining operational efficiencies. Additionally, the Company executed targeted reductions in workforce both in the manufacturing and non-manufacturing business functions in certain locations on 2009.

The 2010 restructuring plans and ongoing benefits associated with these plans were immaterial to the current period as well as future periods. The majority of the benefits of the 2009 and 2008 and prior period restructuring plans have been incorporated into the Company’s results. While certain restructuring plans continue to be executed, the future benefits of these on the Company’s results would be immaterial in the period realized.

As of December 31, 2010, the Company’s restructuring accruals were as follows:

	Severances
	2008 and
(in thousands)	Prior Plans			2009 Plans			2010 Plans			Total

Balance, December 31, 2009	$	5,505		$	3,240		$	-		$	8,745
Provisions and adjustments		(700	)		(514	)		6,552			5,338
Amounts applied		(2,780	)		(1,873	)		(1,292	)		(5,945	)
Balance, December 31, 2010	$	2,025		$	853		$	5,260		$	8,138

	Lease/contract terminations
	2008 and
(in thousands)	Prior Plans			Total

Balance, December 31, 2009	$	1,093		$	1,093
Provisions and adjustments		-			-
Amounts applied		(97	)		(97	)
Balance, December 31, 2010	$	996		$	996

	Other restructuring costs
	2008 and
(in thousands)	Prior Plans			2009 Plans			2010 Plans			Total

Balance, December 31, 2009	$	112		$	16		$	-		$	128
Provisions and adjustments		90			209			206			505
Amounts applied		(161	)		(209	)		(206	)		(576	)
Balance, December 31, 2010	$	41		$	16		$	-		$	57

The following table provides the cumulative amounts for the provisions and adjustments and amounts applied for all the plans by segment:

	December 31,		Provisions		Amounts			December 31,
(in thousands)	2009		and adjustments		applied			2010

U.S., Germany and Certain Other European Regions Consumable Businesses	$	1,247	$	405	$	(561	)	$	1,091

France, U.K., Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses		84		422		(391	)		115

Canada/Latin America/Endodontics/ Orthodontics		638		582		(820	)		400

Dental Laboratory Business/ Implants/Non-Dental		7,997		4,434		(4,846	)		7,585
Total Balance	$	9,966	$	5,843	$	(6,618	)	$	9,191

Other Costs

In 2010, the Company recorded certain other costs of $5.2 million, of which $3.7 million related to legal matters. The remaining portion consists of impairments related to intangible assets and acquisition related costs. In 2009, the Company recorded certain other costs of $0.9 million related to legal matters and an impairment of an intangible asset.

FINANCIAL INSTRUMENTS AND DERIVATIVES

12 Months Ended

Dec. 31, 2010

FINANCIAL INSTRUMENTS AND DERIVATIVES

NOTE 15 – FINANCIAL INSTRUMENTS AND DERIVATIVES

Derivative Instruments and Hedging Activities

The Company's activities expose it to a variety of market risks, which primarily include the risks related to the effects of changes in foreign currency exchange rates, interest rates and commodity prices. These financial exposures are monitored and managed by the Company as part of its overall risk management program. The objective of this risk management program is to reduce the volatility that these market risks may have on the Company's operating results and equity.

Certain of the Company's inventory purchases are denominated in foreign currencies, which expose the Company to market risk associated with foreign currency exchange rate movements. The Company's policy generally is to hedge major foreign currency transaction exposures through foreign exchange forward contracts. These contracts are entered into with major financial institutions thereby minimizing the risk of credit loss. In addition, the Company's investments in foreign subsidiaries are denominated in foreign currencies, which create exposures to changes in foreign currency exchange rates. The Company uses debt and derivatives denominated in the applicable foreign currency as a means of hedging a portion of this risk.

With the Company’s significant level of variable interest rate long-term debt and net investment hedges, changes in the interest rate environment can have a major impact on the Company’s earnings, depending upon its interest rate exposure. As a result, the Company manages its interest rate exposure with the use of interest rate swaps, when appropriate, based upon market conditions.

The manufacturing of some of the Company’s products requires the use of commodities, which are subject to market fluctuations. In order to limit the unanticipated impact on income from such market fluctuations, the Company selectively enters into commodity swaps for certain materials used in the production of its products. Additionally, the Company uses non-derivative methods, such as the precious metal consignment agreements to effectively hedge commodity risks.

Cash Flow Hedges

The Company uses interest rate swaps to convert a portion of its variable interest rate debt to fixed interest rate debt. As of December 31, 2010, the Company has two groups of significant variable interest rate to fixed rate interest rate swaps. One of the groups of swaps has notional amounts totaling 12.6 billion Japanese yen, and effectively converts the underlying variable interest rates to an average fixed interest rate of 1.6% for a term of ten years, ending in March 2012. Another swap has a notional amount of 65.0 million Swiss francs, and effectively converts the underlying variable interest rates to a fixed interest rate of 4.2% for a term of seven years, ending in March 2012. The Company enters into interest rate swap contracts infrequently as they are only used to manage interest rate risk on long-term debt instruments and not for speculative purposes.

The Company selectively enters into commodity swaps to effectively fix certain variable raw material costs. At December 31, 2010, the Company had swaps in place to purchase 270 troy ounces of platinum bullion for use in the production of its impression material products. The average fixed rate of this agreement is $1,739 per troy ounce. In addition, the Company had swaps in place to purchase 5,736 troy ounces of silver bullion for use in the production of its dental amalgam products at an average fixed rate of $16 per troy ounce.

The Company enters into forward exchange contracts to hedge the foreign currency exposure of its anticipated purchases of certain inventory. In addition, exchange contracts are used by certain of the Company's subsidiaries to hedge intercompany inventory purchases, which are denominated in non-local currencies. The forward contracts that are used in these programs typically mature in twelve months or less. For these derivatives which qualify as hedges of future anticipated cash flows, the effective portion of changes in fair value is temporarily deferred in AOCI and then recognized in earnings when the hedged item affects earnings.

The following tables summarize the fair value of the Company’s cash flow hedges at December 31, 2010.

Foreign Exchange Forward Contracts	Notional Amounts						Fair Value Net Asset (Liability)
(in thousands)	2010			2011			December 31, 2010

Forward sale, 11.2 million Australian dollars	$	10,460		$	972		$	(784	)
Forward purchase, 8.4 million British pounds		(12,286	)		(772	)		250
Forward sale, 34.3 million Canadian dollars		31,114			3,428			(664	)
Forward sale, 5.2 million Danish krone		925			-			10
Forward sale, 5.2 million euros		6,923			-			1,916
Forward sale, 407.5 million Japanese yen		5,019			-			268
Forward sale, 118.7 million Mexican pesos		9,615			-			12
Forward purchase, 1.5 million Norwegian krone		(262	)		-			1
Forward sale, 2.0 million Singapore dollars		1,585			-			(10	)
Forward sale, 527.9 million South Korean won		509			-			(3	)
Forward purchase, 11.5 million Swiss francs		(12,324	)		-			423
Forward sale, 23.6 million Taiwanese dollars		805			- -			4

Total foreign exchange forward contracts	$	42,083		$	3,628		$	1,423

	Notional Amount										Fair Value Net Asset (Liability)
Interest Rate Swaps (in thousands)	2011		2012		2013		2014		2015 and Beyond		December 31, 2010

Euro	$	1,262	$	1,262	$	1,262	$	965	$	3,136	$	(660	)
Japanese yen		-		154,626		-		-		-		(2,058	)
Swiss francs		- -		69,560		- -		- -		- -		(3,026	)
Total interest rate swaps	$	1,262	$	225,448	$	1,262	$	965	$	3,136	$	(5,744	)

	Notional Amount			Fair Value Net Asset (Liability)
Commodity Contracts (in thousands)	2011			December 31, 2010

Silver swap - U.S. dollar	$	(93	)	$	82
Platinum swap - U.S. dollar		(470	)		6
Total commodity contracts	$	(563	)	$	88

Hedges of Net Investments in Foreign Operations

The Company has numerous investments in foreign subsidiaries. The net assets of these subsidiaries are exposed to volatility in currency exchange rates. Currently, the Company uses non-derivative financial instruments, including foreign currency denominated debt held at the parent company level and derivative financial instruments to hedge some of this exposure. Translation gains and losses related to the net assets of the foreign subsidiaries are offset by gains and losses in the non-derivative and derivative financial instruments designated as hedges of net investments.

During the first quarter of 2010, the Company entered into new cross currency basis swaps of Swiss francs 100.0 million and Swiss francs 55.5 million (collectively the “Swiss Swaps”). The Swiss Swaps mature in February 2013, and the Company pays three month Swiss franc London Inter-Bank Offered Rate (“LIBOR”) and receives three month U.S. dollar LIBOR. The new contracts were entered into to replace maturing contracts. During the fourth quarter of 2010, the Company entered into new cross currency basis swaps of euro 108.0 million (“Euro Swaps”). The Euro Swaps mature in December 2013, and the Company pays three month Euro Inter-Bank Offered Rate (“EURIBOR”) and receives three month U.S. dollar LIBOR. The new contracts were entered into to replace maturing contracts. The Swiss franc and euro cross currency interest rate swaps are designated as net investment hedges of the Swiss franc and euro denominated net assets. The interest rate differential is recognized in income as interest income or interest expense as it is accrued, the foreign currency revaluation is recorded in AOCI, net of tax.

The fair value of these cross currency interest rate swap agreements is the estimated amount the Company would either pay or receive at the reporting date, taking into consideration the effective interest rates and foreign exchange rates. As of December 31, 2010 and December 31, 2009, the estimated net fair values of the swap agreements were negative $169.1 million and negative $176.6 million, respectively, which are recorded in AOCI, net of tax, and as other noncurrent liabilities and other noncurrent assets in the consolidated balance sheets.

At December 31, 2010 and December 31, 2009, the Company had Swiss franc-denominated and Japanese yen-denominated debt and cross currency basis swaps denominated in euro and Swiss franc to hedge the currency exposure related to a designated portion of the net assets of its European, Swiss and Japanese subsidiaries. At December 31, 2010 and 2009, the accumulated translation gains on investments in foreign subsidiaries, primarily denominated in euro, Swiss franc and Japanese yen, net of these net investment hedges, were $45.4 million and $111.1 million, respectively, which are included in AOCI, net of tax.

The following table summarizes the fair value of the Company’s cross currency basis swaps that are designated as hedges of net investments in foreign operations at December 31, 2010:

	Notional Amount						Fair Value Net Asset (Liability)
Cross Currency Basis Swaps (in thousands)	2011		2012		2013		December 31, 2010

Swiss franc 592.5 million @ 1.17 pay CHF 3 mth. LIBOR rec. USD 3 mth. LIBOR	$	86,040	$	60,570	$	487,455	$	(126,987	)
Euro 358.0 million @ $1.22 pay EUR 3 mth. EURIBOR rec. USD 3 mth. LIBOR		- -		- -		478,360		(42,118	)
Total cross currency basis swaps	$	86,040	$	60,570	$	965,815	$	(169,105	)

As of December 31, 2010, net losses on derivative instruments of $0.8 million, which were recorded in AOCI, net of tax, are expected to be reclassified to current earnings during the next twelve months. This reclassification is primarily due to the sale of inventory that includes previously hedged purchases and interest rate swaps. The maximum term over which the Company is hedging exposures to variability of cash flows (for all forecasted transactions, excluding interest payments on variable interest rate debt) is eighteen months. Overall, the derivatives designated as cash flow hedges are highly effective. Any cash flows associated with these instruments are included in cash provided by operating activities in the consolidated statements of cash flows in accordance with the Company’s policy of classifying the cash flows from these instruments in the same category as the cash flows from the items being hedged.

The following tables summarize the fair value and location on the consolidated balance sheets of the Company’s derivatives at:

	December 31, 2010
	Prepaid
(in thousands)	Expenses		Other				Other
	and Other		Noncurrent		Accrued		Noncurrent
Designated as Hedges	Current Assets		Assets, Net		Liabilities		Liabilities

Foreign exchange forward contracts	$	2,455	$	21	$	1,139	$	135
Commodity contracts		88		-		-		-
Interest rate swaps		-		-		4,213		871
Cross currency basis swaps		- -		- -		21,516		147,589
Total	$	2,543	$	21	$	26,868	$	148,595

Not Designated as Hedges

Foreign exchange forward contracts	$	821	$	-	$	600	$	-
Interest rate swaps		- -		- -		104		556
Total	$	821	$	-	$	704	$	556

	December 31, 2009
	Prepaid
(in thousands)	Expenses		Other				Other
	and Other		Noncurrent		Accrued		Noncurrent
Designated as Hedges	Current Assets		Assets, Net		Liabilities		Liabilities

Foreign exchange forward contracts	$	598	$	5	$	1,010	$	16
Commodity contracts		293		-		-		-
Interest rate swaps		-		-		6,130		2,775
Cross currency basis swaps		- -		- -		52,411		124,210
Total	$	891	$	5	$	59,551	$	127,001

Not Designated as Hedges

Foreign exchange forward contracts	$	556	$	-	$	409	$	-
Interest rate swaps		- -		- -		- -		882
Total	$	556	$	-	$	409	$	882

The following tables summarize the statements of operations impact of the Company’s cash flow hedges for the years ended December 31, 2010 and 2009:

December 31, 2010

Derivatives in Cash Flow Hedging					Effective Portion
	Gain (Loss)			Classification	Reclassified from
(in thousands)	in AOCI			of Gains (Losses)	AOCI into Income
Interest rate contracts	$	(1,978	)	Interest expense	$	(5,636	)
Foreign exchange forward contracts		2,314		Cost of products sold		665
Foreign exchange forward contracts		670		SG&A expenses		630
Commodity contracts		324		Cost of products sold		662
Total	$	1,330			$	(3,679	)

Derivatives in Cash Flow Hedging		Ineffective portion
	Classification	Recognized
(in thousands)	of Gains (Losses)	in Income
Interest rate contracts	Other expense, net	$	232
Foreign exchange forward contracts	Interest expense		(658	)
Foreign exchange forward contracts	Interest expense		(14	)
Commodity contracts	Interest expense		(14	)
Total		$	(454	)

December 31, 2009

Derivatives in Cash Flow Hedging					Effective Portion
	Gain (Loss)			Classification	Reclassified from
(in thousands)	in AOCI			of Gains (Losses)	AOCI into Income
Interest rate contracts	$	(4,186	)	Interest expense	$	(8,035	)
Foreign exchange forward contracts		(999	)	Cost of products sold		905
Foreign exchange forward contracts		660		SG&A expenses		459
Commodity contracts		1,655		Cost of products sold		(1,149	)
Total	$	(2,870	)		$	(7,820	)

Derivatives in Cash Flow Hedging		Ineffective portion
	Classification	Recognized
(in thousands)	of Gains (Losses)	in Income
Interest rate contracts	Other expense, net	$	(168	)
Foreign exchange forward contracts	Interest expense		(330	)
Foreign exchange forward contracts	Interest expense		(40	)
Commodity contracts	Interest expense		(48	)
Total		$	(586	)

The following tables summarize the statement of operations impact of the Company’s hedges of net investments for the years ended December 31, 2010 and 2009:

December 31, 2010

Derivatives in Net Investment Hedging					Gain (Loss)
	Gain (Loss)			Classification	Recognized
(in thousands)	in AOCI			of Gains (Losses)	in Income
Cross currency interest rate swaps	$	(61,211	)	Interest income	$	869
				Interest expense		(105	)
Cross currency interest rate swaps		34,862		Interest expense		(2,508	)
Total	$	(26,349	)		$	(1,744	)

December 31, 2009

Derivatives in Net Investment Hedging					Gain (Loss)
	Gain (Loss)			Classification	Recognized
(in thousands)	in AOCI			of Gains (Losses)	in Income
Cross currency interest rate swaps	$	(13,877	)	Interest income	$	1,420
				Interest expense		(85	)
Cross currency interest rate swaps		(13,868	)	Interest expense		(4,098	)
Total	$	(27,745	)		$	(2,763	)

The following table summarizes the statement of operations impact of the Company’s hedges not designated as hedging for the years ended December 31, 2010 and 2009:

Derivatives Not Designated as Hedging
	Classification	December 31,
(in thousands)	of Gains (Losses)	2010			2009
Foreign exchange forward contracts	Other expense, net	$	1,181		$	(14,984	)
Interest rate contracts	Other expense, net		-			(2	)
Interest rate contracts	Interest expense		(155	)		(514	)
Total		$	1,026		$	(15,500	)

Amounts recorded in AOCI related to cash flow hedging instruments at:

	December 31,
(in thousands, net of tax)	2010			2009

Beginning balance	$	(4,799	)	$	(7,874	)

Changes in fair value of derivatives		1,248			(1,627	)
Reclassifications to earnings from equity		2,083			4,702
Total activity		3,331			3,075

Ending balance	$	(1,468	)	$	(4,799	)

Amounts recorded in AOCI related to hedges of net investments in foreign operations at:

	December 31,
(in thousands, net of tax)	2010			2009

Beginning balance	$	111,115		$	77,584

Foreign currency translation adjustment		(33,208	)		49,685
Changes in fair value of:
foreign currency debt		(16,311	)		881
derivative hedge instruments		(16,179	)		(17,035	)
Total activity		(65,698	)		33,531

Ending balance	$	45,417		$	111,115

FAIR VALUE MEASUREMENT

12 Months Ended

Dec. 31, 2010

FAIR VALUE MEASUREMENT

NOTE 16 – FAIR VALUE MEASUREMENT

The Company records financial instruments at fair value with unrealized gains and losses related to certain financial instruments reflected in AOCI on the consolidated balance sheets. In addition, the Company recognizes certain liabilities at fair value.

The fair value of financial instruments is determined by reference to various market data and other valuation techniques as appropriate. The Company believes the carrying amounts of cash and cash equivalents, accounts receivable (net of allowance for doubtful accounts), prepaid expenses and other current assets, accounts payable, accrued liabilities, income taxes payable and notes payable approximate fair value due to the short-term nature of these instruments. The Company estimates the fair value and carrying value of its total long-term debt, including current portion, was $611.2 million and $606.5 million, respectively, as of December 31, 2010. As of December 31, 2009, the fair value approximated the carrying value, which was $453.7 million. The interest rate on the $250.0 million Private Placement Note is a fixed rate of 4.1%, and the fair value is based on the interest rates as of December 31, 2010. The interest rates on term loan debt and commercial paper are variable, and therefore the fair value of these instruments approximates their carrying values.

The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2010 and December 31, 2009, which are classified as “Cash and cash equivalents,” “Prepaid expenses and other current assets,” “Long-Term investments,” “Other noncurrent assets, net,” “Accrued liabilities,” and “Other noncurrent liabilities.” Financial assets and liabilities that are recorded at fair value as of the balance sheet date are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

	December 31, 2010
(in thousands)	Total		Level 1		Level 2		Level 3

Assets
Money market funds	$	380,593	$	380,593	$	-	$	-
Commodity forward purchase contracts		88		-		88		-
Foreign exchange forward contracts		3,297		-		3,297		-
Corporate convertible bonds		66,024		- -		- -		66,024
Total assets	$	450,002	$	380,593	$	3,385	$	66,024

Liabilities
Interest rate swaps	$	5,744	$	-	$	5,744	$	-
Cross currency interest rate swaps		169,105		-		169,105		-
Foreign exchange forward contracts		1,874		- -		1,874		- -
Total liabilities	$	176,723	$	-	$	176,723	$	-

	December 31, 2009
(in thousands)	Total		Level 1		Level 2		Level 3

Assets
Money market funds	$	364,765	$	364,765	$	-	$	-
Interest rate swaps		293		-		293		-
Foreign exchange forward contracts		1,159		-		1,159		-
Total assets	$	366,217	$	364,765	$	1,452	$	-

Liabilities
Interest rate swaps	$	9,787	$	-	$	9,787	$	-
Cross currency interest rate swaps		176,621		-		176,621		-
Commodity forward purchase contracts		1,435		-		1,435		-
Total liabilities	$	187,843	$	-	$	187,843	$	-

Derivative valuations are based on observable inputs to the valuation model including interest rates, foreign currency exchange rates, future commodities prices and credit risks.

The commodity forward purchase contracts, interest rate swaps and foreign exchange forward contracts are considered cash flow hedges and cross currency interest rate swaps are considered hedge of net investments in foreign operations as discussed in Note 15, Financial Instruments and Derivatives.

The Company’s investment in corporate convertible bonds relates specifically to convertible bonds issued by DIO Corporation, as discussed in Note 3, Business Acquisitions and Investments in Affiliates, and is reported in “Other noncurrent assets, net,” on the consolidated balance sheets. The Company has designated the corporate bond investment as an available-for-sale security and therefore records the changes in fair value of the investment through AOCI. The income method valuation technique is used by the Company to fair value the corporate bonds. The significant unobservable inputs for valuing the corporate bonds are DIO Corporation’s stock volatility factor and corporate bond rating. Significant other observable inputs used to value the corporate bonds include foreign exchange rates and DIO Corporation’s period-ending market stock price.

The following table presents a reconciliation of the Company’s assets measured at fair value on a recurring basis using unobservable inputs (Level 3):

(in thousands)
	Level 3
Balance, December 31, 2009	$	-
Purchases, gross		49,654
Sales, gross		-
Gains and (losses):
Reported in AOCI - corporate convertible bonds		16,370
Balance, December 31, 2010	$	66,024

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2010

COMMITMENTS AND CONTINGENCIES

NOTE 17 - COMMITMENTS AND CONTINGENCIES

Leases

The Company leases automobiles and machinery and equipment and certain office, warehouse and manufacturing facilities under non-cancellable leases. The leases generally require the Company to pay insurance, taxes and other expenses related to the leased property. Total rental expense for all operating leases was $34.9 million for 2010, $32.2 million for 2009 and $29.5 million for 2008.

Rental commitments, principally for real estate (exclusive of taxes, insurance and maintenance), automobiles and office equipment are as follows:

(in thousands)

2011	$	25,778
2012		17,295
2013		10,262
2014		7,259
2015		4,848
2016 and thereafter		9,072
	$	74,514

Litigation

On June 18, 2004, Marvin Weinstat, DDS and Richard Nathan, DDS filed a class action suit in San Francisco County, California alleging that the Company misrepresented that its Cavitron® ultrasonic scalers are suitable for use in oral surgical procedures. The Complaint seeks a recall of the product and refund of its purchase price to dentists who have purchased it for use in oral surgery. The Court certified the case as a class action in June 2006 with respect to the breach of warranty and unfair business practices claims. The class is defined as California dental professionals who purchased and used one or more Cavitron® ultrasonic scalers for the performance of oral surgical procedures. The Company filed a motion for decertification of the class and this motion was granted. Plaintiffs appealed the decertification of the class to the California Court of Appeals and the Court of Appeals reversed the decertification decision of the trial Court. This case has been remanded to and is pending in the San Francisco County Court.

On December 12, 2006, a Complaint was filed by Carole Hildebrand, DDS and Robert Jaffin, DDS in the Eastern District of Pennsylvania (the Plaintiffs subsequently added Dr. Mitchell Goldman as a named class representative). The case was filed by the same law firm that filed the Weinstat case in California. The Complaint asserts putative class action claims on behalf of dentists located in New Jersey and Pennsylvania. The Complaint seeks damages and asserts that the Company’s Cavitron® ultrasonic scaler was negligently designed and sold in breach of contract and warranty arising from misrepresentations about the potential uses of the product because it cannot assure the delivery of potable or sterile water. Plaintiffs have filed their Motion for class certification to which the Company has filed its response. The Company also filed other motions, including a Motion to dismiss the claims of Drs. Hildebrand and Jaffin for lack of standing. The Court granted this Motion for lack of standing of the individuals and did not allow the plaintiffs to amend the complaint to substitute their corporate practices, leaving Dr. Goldman as a putative class representative in Pennsylvania, raising a question of jurisdiction of the U.S. District Court. The plaintiffs have now filed another complaint in which they named the corporate practices of Drs. Hildebrand and Jaffin as class representatives. The Company has moved to dismiss this complaint.

On November 21, 2008, Guidance Endodontics LLC filed a complaint in the U.S. District Court of New Mexico asserting claims against DENTSPLY arising principally out of a breach of a manufacturing and supply contract between the parties. Prior to trial, Guidance had claimed its damages were $1.2 million. The case went to trial in late September and early October 2009. On October 9, 2009, a jury returned a verdict against DENTSPLY, in the amount of approximately $4.0 million for past and future compensatory damages and $40.0 million in punitive damages. In April 2010, the District Court Judge formally entered the verdict that was reached in October 2009. The Company believes that this decision is not supported by the facts in the case or the applicable law and intends to vigorously pursue all available options to challenge it. The Company has filed a number of separate post-trial motions with the District Court to overturn various aspects of the verdict, including the punitive and future damages, or in the alternative to be granted a new trial, because of the inappropriateness of such verdicts. The Court has denied the Company’s post-trial Motions on which it has ruled. The Company has two remaining Motions pending which the Court has not yet ruled on.

As of December 31, 2010, a reasonable estimate of a possible range of loss related to the above litigation cannot be made except as reflected in the preceding paragraph. DENTSPLY does not believe the outcome of any of these matters will have a material adverse effect on its financial position. In the event that one or more of these matters is unfavorably resolved, it is possible the Company’s results from operations could be materially impacted.

Other

The Company has no material non-cancelable purchase commitments.

The Company has employment agreements with its executive officers. These agreements generally provide for salary continuation for a specified number of months under certain circumstances. If all of the employees under contract were to be terminated by the Company without cause, as defined in the agreements, the Company's liability would be approximately $13.4 million at December 31, 2010.

SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Dec. 31, 2010
Statement [Line Items]
Use Of Estimates	Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company. The Company also consolidates all variable interest entities (“VIE”) where the Company has determined that it has the power to direct the activities that most significantly impact the VIE’s economic performance and shares in either the significant risks or rewards of the VIE. The Company continually reassesses its VIE to determine if consolidation is appropriate. All significant intercompany accounts and transactions are eliminated in consolidation. Investments in nonconsolidated affiliates (20-50 percent owned companies, joint ventures and partnerships as well as less than 20 percent ownership positions where the Company maintains significant influence over the subsidiary) are accounted for using the equity method.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents include deposits with banks as well as highly liquid time deposits with maturities at the date of purchase of ninety days or less.
Short-term Investments	Short-term Investments Short-term investments are highly liquid time deposits with original maturities at the date of purchase greater than ninety days and with remaining maturities of one year or less.
Accounts and Notes Receivable-Trade	Accounts and Notes Receivable-Trade The Company sells dental products through a worldwide network of distributors and directly to end users. For customers on credit terms, the Company performs ongoing credit evaluation of those customers' financial condition and generally does not require collateral from them. The Company establishes allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company records a provision for doubtful accounts, which is included in “Selling, general and administrative expenses.” Accounts receivable – trade is stated net of these allowances that were $8.8 million and $12.2 million at December 31, 2010 and 2009, respectively. For the years ended December 31, 2010 and 2009, the Company wrote-off $2.6 million and $4.3 million, respectively, of accounts receivable that were previously reserved. The tighter credit markets caused the Company to reassess and tighten its controls over customer credit terms, increase collection efforts and analyze accounts receivable activity. This, along with improved customer liquidity, enabled the Company to reduce the provision for doubtful accounts by $0.2 million and $3.1 million in 2010 and 2009, respectively. Additionally, notes receivable – trade is stated net of these allowances that were $0.8 million and $1.1 million at December 31, 2010 and 2009, respectively. The Company recorded provisions for doubtful accounts on notes receivable – trade of $0.7 million for 2010 and $0.5 million for 2009. Additionally, the Company wrote-off $1.0 million in 2010.
Inventories	Inventories Inventories are stated at the lower of cost or market. At December 31, 2010 and 2009, the cost of $6.9 million, or 2.2%, and $7.8 million, or 2.7%, respectively, of inventories was determined by the last in, first-out (“LIFO”) method. The cost of other inventories was determined by the first-in, first-out (“FIFO”) or average cost methods. The Company establishes reserves for inventory estimated to be obsolete or unmarketable equal to the difference between the cost of inventory and estimated market value based upon assumptions about future demand and market conditions. If the FIFO method had been used to determine the cost of LIFO inventories, the amounts at which net inventories are stated would be higher than reported at December 31, 2010 and 2009 by $4.9 million and $4.0 million, respectively.
Valuation of Goodwill and Other Long-Lived Assets	Valuation of Goodwill and Other Long-Lived Assets Assessment of the potential impairment of goodwill and other long-lived assets is an integral part of the Company’s normal ongoing review of operations. Testing for potential impairment of these assets is significantly dependent on assumptions and reflects management’s best estimates at a particular point in time. The dynamic economic environments in which the Company’s businesses operate and key economic and business assumptions with respect to projected selling prices, increased competition and introductions of new technologies can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time at which such impairments are recognized. If there are unfavorable changes in these assumptions, the future cash flows, a key variable in assessing the impairment of these assets, may decrease and as a result the Company may be required to recognize impairment charges. Future changes in the environment and the economic outlook for the assets being evaluated could also result in additional impairment charges being recognized. The following information outlines the Company’s significant accounting policies on long-lived assets by type. Goodwill US GAAP requires that at least an annual impairment test be applied to goodwill. The Company performs impairment tests using a fair value approach. If impairment is identified on goodwill, the resulting charge is determined by recalculating goodwill through a hypothetical purchase price allocation of the fair value and reducing the current carrying value to the extent it exceeds the recalculated goodwill. The Company’s fair value approach involves using a discounted cash flow model with market-based support as its valuation technique to measure the fair value for its reporting units. The discounted cash flow model uses five year forecasted cash flows plus a terminal value based on a multiple of earnings. In addition, the Company applies gross profit and operating expense assumptions consistent with its historical trends. The total cash flows were discounted based on market participant data, which included the Company’s weighted-average cost of capital. The Company considered the current market conditions when determining its assumptions. Lastly, the Company reconciled the aggregate fair values of its reporting units to its market capitalization, which included a reasonable control premium based on market conditions. Additional information related to the testing for goodwill impairment is provided in Note 8, Goodwill and Intangible Assets. Identifiable Definite-Lived Intangible Assets Identifiable definite-lived intangible assets, which primarily consist of patents, trademarks, brand names, non-compete agreements and licensing agreements, are amortized on a straight-line basis over their estimated useful lives. These assets are reviewed for impairment whenever events or circumstances suggest that the carrying amount of the asset may not be recoverable. The Company closely monitors certain intangible assets related to new and existing technologies for indicators of impairment as these assets have more risk of becoming impaired. Impairment is based upon an initial evaluation of the identifiable undiscounted cash flows. If the initial evaluation identifies a potential impairment, a fair value is determined by using a discounted cash flows valuation. If impaired, the resulting charge reflects the excess of the asset’s carrying cost over its fair value. Property, Plant and Equipment Property, plant and equipment are stated at cost, net of accumulated depreciation. Except for leasehold improvements, depreciation for financial reporting purposes is computed by the straight-line method over the following estimated useful lives: buildings - generally 40 years and machinery and equipment - 4 to 15 years. The cost of leasehold improvements is amortized over the shorter of the estimated useful life or the term of the lease. Maintenance and repairs are expensed as incurred to the statement of operations; replacements and major improvements are capitalized. These assets groups are reviewed for impairment whenever events or circumstances suggest that the carrying amount of the asset group may not be recoverable. Impairment is based upon an evaluation of the identifiable undiscounted cash flows. If impaired, the resulting charge reflects the excess of the asset group’s carrying cost over its fair value.
Marketable Security	Marketable Security The Company’s marketable securities consist of debt instruments that are classified as available-for-sale in “Other noncurrent assets” on the consolidated balance sheets as the instruments mature in December 2015. The Company determined the appropriate classification at the time of purchase and will re-evaluate such designation as of each balance sheet date. In addition, the Company reviews the securities each quarter for indications of possible impairment. Once impairment is identified, the determination of whether the impairment is temporary or other-than-temporary requires significant judgment. The primary factors that the Company considers in classifying the impairment include the extent and time the fair value of each investment has been below cost and the existence of a credit loss. If a decline in fair value is judged other-than-temporary, the basis of the securities is written down to fair value and the amount of the write-down is included as a realized loss.
Derivative Financial Instruments	Derivative Financial Instruments The Company requires that all derivative instruments be recorded on the balance sheet at fair value and that changes in fair value be recorded each period in current earnings or accumulated other comprehensive income (“AOCI”). The Company employs derivative financial instruments to hedge certain anticipated transactions, firm commitments, and assets and liabilities denominated in foreign currencies. Additionally, the Company utilizes interest rate swaps to convert floating rate debt to fixed rate, fixed rate debt to floating rate, cross currency basis swaps to convert debt denominated in one currency to another currency, and commodity swaps to fix its variable raw materials costs.
Pension and Other Postretirement Benefits	Pension and Other Postretirement Benefits Substantially all of the employees of the Company and its subsidiaries are covered by government or Company-sponsored defined benefit or defined contribution plans. Additionally, certain union and salaried employee groups in the United States are covered by postretirement healthcare plans. Costs for Company-sponsored plans are based on expected return on plan assets, discount rates, employee compensation increase rates and health care cost trends. Expected return on plan assets, discount rates and health care cost trend assumptions are particularly important when determining the Company’s benefit obligations and net periodic benefit costs associated with postretirement benefits. Changes in these assumptions can impact the Company’s earnings before income taxes. In determining the cost of postretirement benefits, certain assumptions are established annually to reflect market conditions and plan experience to appropriately reflect the expected costs as actuarially determined. These assumptions include medical inflation trend rates, discount rates, employee turnover and mortality rates. The Company predominantly uses liability durations in establishing its discount rates, which are observed from indices of high-grade corporate bond yields in the respective economic regions of the plans. The expected return on plan assets is the weighted average long-term expected return based upon asset allocations and historic average returns for the markets where the assets are invested, principally in foreign locations. The Company reports the funded status of its defined benefit pension and other postretirement benefit plans on its consolidated balance sheets as a net liability or asset. Additional information related to the impact of changes in these assumptions is provided in Note 13, Benefit Plans.
Accruals for Self-Insured Losses	Accruals for Self-Insured Losses The Company maintains insurance for certain risks, including workers’ compensation, general liability, product liability and vehicle liability, and is self-insured for employee related health care benefits. The Company accrues for the expected costs associated with these risks by considering historical claims experience, demographic factors, severity factors and other relevant information. Costs are recognized in the period the claim is incurred, and the financial statement accruals include an estimate of claims incurred but not yet reported. The Company has stop-loss coverage to limit its exposure to any significant exposure on a per claim basis.
Litigation	Litigation The Company and its subsidiaries are from time to time parties to lawsuits arising out of their respective operations. The Company records liabilities when a loss is probable and can be reasonably estimated. These estimates are typically in the form of ranges, and the Company records the liabilities at the low point of the ranges. The ranges established by management are based on an analysis made by internal and external legal counsel who considers information known at the time. If the Company determines a liability to be only reasonably possible, it considers the same information to estimate the possible exposure and disclose any material potential liability. These loss contingencies are monitored regularly for a change in fact or circumstance that would require an accrual adjustment. The Company believes it has estimated liabilities for probable losses well in the past; however, the unpredictability of litigation and court decisions could cause a liability to be incurred in excess of estimates. Legal costs related to these lawsuits are expensed as incurred.
Accumulated Other Comprehensive Income	Accumulated Other Comprehensive Income AOCI includes foreign currency translation adjustments related to the Company’s foreign subsidiaries, net of the related changes in certain financial instruments hedging these foreign currency investments. In addition, changes in the Company’s fair value of certain derivative financial instruments, net unrealized holding gain on available-for-sale securities and pension liability adjustments and prior service costs, net are recorded in AOCI. These changes are recorded in AOCI net of any related tax adjustments. For the years ended December 31, 2010, 2009 and 2008, these tax adjustments were $158.7 million, $143.0 million and $138.5 million, respectively, primarily related to foreign currency translation adjustments.
Foreign Currency Translation	Foreign Currency Translation The functional currency for foreign operations, except for those in highly inflationary economies, has been determined to be the local currency. Assets and liabilities of foreign subsidiaries are translated at foreign exchange rates on the balance sheet date; revenue and expenses are translated at the average year-to-date foreign exchange rates. The effects of these translation adjustments are reported in Equity within AOCI of the consolidated balance sheets. During the year ended December 31, 2010, the Company had losses of $16.3 million on its loans designated as hedges of net investments and translation losses of $33.2 million. During the year ended December 31, 2009, the Company had gains of $0.9 million on its loans designated as hedges of net investments and translation gains of $49.7 million. Foreign exchange gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved and remeasurement adjustments in countries with highly inflationary economies are included in income. Net foreign exchange losses of $3.3 million, net foreign exchange gains of $0.3 million and net foreign exchange losses of $8.9 million in 2010, 2009, and 2008, respectively, are included in “Other expense (income), net.”
Revenue Recognition	Revenue Recognition Revenue, net of related discounts and allowances, is recognized when the earnings process is complete. This occurs when products are shipped to or received by the customer in accordance with the terms of the agreement, title and risk of loss have been transferred, collectability is reasonably assured and pricing is fixed or determinable. Net sales include shipping and handling costs collected from customers in connection with the sale. Sales taxes, value added taxes and other similar types of taxes collected from customers in connection with the sale are recorded by the Company on a net basis and are not included in the statement of operations. Certain of the Company’s customers are offered cash rebates based on targeted sales increases. In accounting for these rebate programs, the Company records an accrual as a reduction of net sales for the estimated rebate as sales take place throughout the year. A portion of the Company’s net sales is comprised of sales of precious metals generated through its precious metal dental alloy product offerings. As the precious metal content of the Company’s sales is largely a pass-through to customers, the Company uses its cost of precious metal purchased as a proxy for the precious metal content of sales, as the precious metal content of sales is not separately tracked and invoiced to customers. The Company believes that it is reasonable to use the cost of precious metal content purchased in this manner since precious metal alloy sale prices are typically adjusted when the prices of underlying precious metals change. The precious metals content of sales was $189.2 million, $168.7 million and $200.0 million for 2010, 2009 and 2008, respectively.
Cost of Products Sold	Cost of Products Sold Cost of products sold represents costs directly related to the manufacture and distribution of the Company’s products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling, warehousing and the depreciation of manufacturing, warehousing and distribution facilities. Overhead and related expenses include salaries, wages, employee benefits, utilities, lease costs, maintenance and property taxes.
Warranties	Warranties The Company provides warranties on certain equipment products. Estimated warranty costs are accrued when sales are made to customers. Estimates for warranty costs are based primarily on historical warranty claim experience. Warranty costs are included in “Cost of products sold.
Selling, General and Administrative Expenses	Selling, General and Administrative Expenses Selling, general and administrative expenses represent costs incurred in generating revenues and in managing the business of the Company. Such costs include advertising and other marketing expenses, salaries, employee benefits, incentive compensation, research and development, travel, office expenses, lease costs, amortization of capitalized software and depreciation of administrative facilities.
Research and Development Costs	Research and Development Costs Research and development (“R&D”) costs relate primarily to internal costs for salaries and direct overhead expenses. In addition, the Company contracts with outside vendors to conduct R&D activities. All such R&D costs are charged to expense when incurred. The Company capitalizes the costs of equipment that have general R&D uses and expenses such equipment that is solely for specific R&D projects. The depreciation expense related to this capitalized equipment is included in the Company’s R&D costs. R&D costs are included in “Selling, general and administrative expenses” and amounted to $49.4 million, $50.3 million and $48.5 million for 2010, 2009 and 2008, respectively. The year-over-year comparisons for 2010 versus 2009 and 2009 versus 2008 were both impacted by foreign currency translation which decreased the reported expense variations.
Stock Compensation	Stock Compensation The Company recognizes the compensation cost relating to share-based payment transactions in the financial statements. The cost of share-based payment transactions is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity awards). The compensation cost is only recognized for the portion of the awards that are expected to vest.
Income Taxes	Income Taxes The Company’s tax expense includes U.S. and international income taxes plus the provision for U.S. taxes on undistributed earnings of international subsidiaries not deemed to be permanently invested. Tax credits and other incentives reduce tax expense in the year the credits are claimed. Certain items of income and expense are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. Deferred tax assets are recognized if it is more likely than not that the assets will be realized in future years. The Company establishes a valuation allowance for deferred tax assets for which realization is not likely. The Company applies a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company recognizes in the financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position.
Earnings Per Share	Earnings Per Share Basic earnings per share are calculated by dividing net earnings by the weighted average number of shares outstanding for the period. Diluted earnings per share is calculated by dividing net earnings by the weighted average number of shares outstanding for the period, adjusted for the effect of an assumed exercise of all dilutive options outstanding at the end of the period.
Business Acquisitions	Business Acquisitions The Company acquires businesses as well as partial interests in businesses. Acquired businesses are accounted for using the acquisition method of accounting which requires that the purchase price be allocated to net assets at their respective fair values. Any excess of the purchase price over estimated fair values of net assets is recorded as goodwill. Under the acquisition method, amounts allocated to acquired in-process research and development and contingent consideration are recorded to the consolidated balance sheet at the date of acquisition at their respective fair values. The assumptions made in determining fair value assigned to acquired assets and liabilities as well as asset lives can materially impact the results of operations. The Company obtains information during due diligence and through other sources to get respective fair values. Examples of factors and information that the Company uses to determine the fair values include: tangible and intangible asset evaluations and appraisals; evaluations of existing contingencies and liabilities; product line integration information; and information systems compatibilities. If the initial accounting for an acquisition is incomplete by the end of the quarter in which the acquisition occurred, the Company will record a provisional estimate in the financial statements. The provisional estimate will be finalized as soon as information becomes available but will only occur up to one year from the acquisition date.
Equity Method Investments	Equity Method Investments Investments in partnerships, joint ventures and less-than-majority-owned subsidiaries in which the Company has significant influence are accounted for under the equity method. Equity investments are carried at original cost adjusted for the proportionate share of the investees’ income, losses and distributions. The Company assesses the carrying value of its equity investments when an indicator of a loss in value is present and record a loss in value of the investment when the assessment indicates that an other-than-temporary decline in the investment exists. The Company classifies its equity in net earnings of unconsolidated affiliates in the consolidated statements of operations under the title of “Equity in net loss of unconsolidated affiliated company”.
Noncontrolling Interests	Noncontrolling Interests The Company reports noncontrolling interest (“NCI”) in a subsidiary as a separate component of Equity in the consolidated balance sheets. Additionally, the Company reports the portion of net income and comprehensive income (loss) attributed to the Company and NCI separately in the consolidated statements of operations. The Company also includes a separate column for NCI in the consolidated statements of changes in equity and comprehensive income.
Variable Interest Entities	Variable Interest Entities On January 1, 2010, the Company adopted the new accounting guidance for variable interest entities (“VIE”). The guidance includes: (1) the elimination of the exemption from consolidation for qualifying special purpose entities, (2) a new approach for determining the primary beneficiary of a VIE, which requires that the primary beneficiary have both (i) the power to control the most significant activities of the VIE and (ii) either the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, and (3) the requirement to continually reassess who should consolidate a VIE. The adoption did not have a material impact on the Company’s financial position and results of operations. The Company consolidates all VIE where the Company has determined that it has the power to direct the activities that most significantly impact the VIE’s economic performance and shares in either the significant risks or rewards of the VIE. The Company continually reassesses VIE to determine if consolidation is appropriate. The Company continues to believe that it is the primary beneficiary of Materialise Dental N.V. (“Materialise”) and Zhermack S.p.A. (“Zhermack”) under this new accounting guidance for VIE. The accounting for Materialise and Zhermack are discussed further in Note 3, Business Acquisitions.
Segment Reporting	Segment Reporting The Company has numerous operating businesses covering a wide range of products and geographic regions, primarily serving the professional dental market. Professional dental products represented approximately 97% of sales in 2010, 2009 and 2008. The Company has four reportable segments and a description of the activities of these segments is included in Note 4, Segment and Geographic Information.
Fair Value Measurement	Fair Value Measurement Recurring Basis The Company records certain financial assets and liabilities at fair value in accordance with the accounting guidance, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring financial instruments at fair value. The three broad levels defined by the fair value hierarchy are as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level 2 – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these financial instruments include, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data. Level 3 – Instruments that have little to no pricing observability as of the reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. The degree of judgment utilized in measuring the fair value of certain financial assets and liabilities generally correlates to the level of pricing observability. Pricing observability is impacted by a number of factors, including the type of financial instrument. Financial assets and liabilities with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, financial assets and liabilities rarely traded or not quoted will generally have less, or no pricing observability and a higher degree of judgment utilized in measuring fair value. The Company primarily applies the market approach for recurring fair value measurements and endeavors to utilize the best available information. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Additionally, the Company considers its credit risks and its counterparties' credit risks when determining the fair values of its financial assets and liabilities. The Company has presented the required disclosures in Note 16, Fair Value Measurement. Non-Recurring Basis When events or circumstances require an asset or liability to be fair valued that otherwise is generally recorded based on another valuation method, such as, net realizable value, the Company will utilize the valuation techniques described above.
Reclassification of Prior Year Amounts	Reclassification of Prior Year Amounts Certain reclassifications have been made to prior years' data in order to conform to current year presentation.

EARNINGS PER COMMON SHARE (Tables)

12 Months Ended

Dec. 31, 2010

Computation of Basic and Diluted Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per common share:

	Net income
	attributable to
	DENTSPLY				Earnings per
(in thousands, except for share amounts)	International		Shares		common share
Year Ended December 31, 2010
Basic	$	265,708		143,980	$	1.85
Incremental shares from assumed exercise of dilutive options		- -		2,005

Diluted	$	265,708		145,985	$	1.82

Year Ended December 31, 2009
Basic	$	274,258		148,319	$	1.85
Incremental shares from assumed exercise of dilutive options		- -		1,783

Diluted	$	274,258		150,102	$	1.83

Year Ended December 31, 2008
Basic	$	283,869		149,069	$	1.90
Incremental shares from assumed exercise of dilutive options		- -		2,610

Diluted	$	283,869		151,679	$	1.87

BUSINESS ACQUISITIONS AND INVESTMENTS IN AFFILIATES (Tables)

12 Months Ended

Dec. 31, 2010

Estimated Fair Values of the Indentified Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair values of the indentified assets acquired and liabilities assumed (in thousands):

Current assets	$	10,755
Property, plant and equipment		1,255
Identifiable intangible assets and goodwill		21,055
Other long-term assets		28
Total assets	$	33,093
Current liabilities		(12,495	)
Long-term liabilities		(1,283	)
Total liabilities	$	(13,778	)
Net assets	$	19,315

SEGMENT AND GEOGRAPHIC INFORMATION (Tables)

12 Months Ended

Dec. 31, 2010

Net Sales, Excluding Precious Metal Content

The following table sets forth information about the Company’s operating groups for the years ended December 31, 2010, 2009 and 2008.

Third Party Net Sales

(in thousands)	2010			2009			2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	526,781		$	526,668		$	459,678

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		482,146			471,232			487,126

Canada/Latin America/Endodontics/
Orthodontics		665,032			621,256			632,151

Dental Laboratory Business/
Implants/Non-Dental		550,359			543,637			618,077

All Other (a)		(3,304	)		(3,415	)		(5,567	)
Total net sales	$	2,221,014		$	2,159,378		$	2,191,465

(a)

Includes amounts recorded at Corporate headquarters.

Net Sales

Third Party Net Sales, Excluding Precious Metal Content

(in thousands)	2010			2009			2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	526,781		$	526,668		$	459,678

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		445,627			436,790			456,192

Canada/Latin America/Endodontics/
Orthodontics		662,556			618,414			628,887

Dental Laboratory Business/
Implants/Non-Dental		400,097			412,209			452,352

All Other (b)		(3,304	)		(3,415	)		(5,567	)
Total net sales, excluding precious metal content	$	2,031,757		$	1,990,666		$	1,991,542
Precious metal content of sales		189,257			168,712			199,923
Total net sales, including precious metal content	$	2,221,014		$	2,159,378		$	2,191,465

(b)

Includes results of Corporate headquarters and one distribution warehouse not managed by named segments.

Intersegment Net Sales

(in thousands)	2010			2009			2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	116,440		$	104,328		$	130,463

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		17,103			13,202			15,941

Canada/Latin America/Endodontics/
Orthodontics		115,158			103,329			106,031

Dental Laboratory Business/
Implants/Non-Dental		112,285			114,591			123,157

All Other (c)		179,780			176,539			177,251
Eliminations		(540,766	)		(511,989	)		(552,843	)
Total	$	- -		$	- -		$	- -

(c)

Includes amounts recorded at Corporate headquarters.

Depreciation and Amortization

(in thousands)	2010		2009		2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	16,315	$	14,945	$	12,807

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		3,939		3,884		3,188

Canada/Latin America/Endodontics/
Orthodontics		18,419		16,978		17,179

Dental Laboratory Business/
Implants/Non-Dental		20,479		21,461		16,062

All Other (d)		7,188		7,907		7,693
Total	$	66,340	$	65,175	$	56,929

(d)

Includes amounts recorded at Corporate headquarters.

Segment Operating Income

(in thousands)	2010			2009			2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	176,128		$	158,389		$	162,717

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		17,187			19,737			14,474

Canada/Latin America/Endodontics/
Orthodontics		195,817			185,772			200,101

Dental Laboratory Business/
Implants/Non-Dental		83,428			92,554			123,442

All Other (e)		(81,303	)		(68,319	)		(87,918	)
Segment Operating Income	$	391,257		$	388,133		$	412,816

Reconciling Items:
Restructuring and other costs		10,984			6,890			32,355
Interest expense		25,089			21,896			32,527
Interest income		(4,254	)		(5,032	)		(17,089	)
Other expense (income), net		1,782			1,023			10,150
Income before income taxes	$	357,656		$	363,356		$	354,873

(e)

Includes results of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments.

Capital Expenditures

(in thousands)	2010		2009		2008

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	9,267	$	8,333	$	19,836

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		2,978		2,506		3,839

Canada/Latin America/Endodontics/
Orthodontics		17,078		14,434		19,593

Dental Laboratory Business/
Implants/Non-Dental		11,397		25,546		24,510

All Other (f)		3,516		5,662		8,662
Total	$	44,236	$	56,481	$	76,440

(f)

Includes capital expenditures of Corporate headquarters.

Company's Operations in Different Geographic Areas

Assets

(in thousands)	2010		2009

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	578,770	$	602,272

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		390,572		388,831

Canada/Latin America/Endodontics/
Orthodontics		932,126		809,924

Dental Laboratory Business/
Implants/Non-Dental		995,090		973,764

All Other (g)		361,393		313,141
Total	$	3,257,951	$	3,087,932

(g)

Includes assets of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments.

	United				Other
(in thousands)	States		Germany		Foreign		Consolidated

2010
Net sales	$	841,232	$	469,796	$	909,986	$	2,221,014
Long-lived assets		119,533		116,916		186,656		423,105

2009
Net sales	$	843,349	$	482,130	$	833,899	$	2,159,378
Long-lived assets		124,129		132,348		183,143		439,620

2008
Net sales	$	865,743	$	470,836	$	854,886	$	2,191,465
Long-lived assets		129,286		131,960		171,029		432,275

Schedule of Sales by Product Category

The following table presents net sales information by product category:

	December 31,
(in thousands)	2010		2009		2008

Dental consumables products	$	717,718	$	708,713	$	677,758
Dental laboratory products		511,061		504,526		558,291
Dental specialty products		925,317		892,421		888,484
Non-dental products		66,918		53,718		66,932
Total net sales	$	2,221,014	$	2,159,378	$	2,191,465

OTHER EXPENSE (INCOME), NET (Tables)

12 Months Ended

Dec. 31, 2010

Other expense (income), net

Other expense (income), net, consists of the following:

	December 31,
(in thousands)	2010			2009		2008

Foreign exchange transaction losses (gains), net	$	3,331		$	336	$	8,881
Other (income) expense, net		(1,549	)		687		1,269
	$	1,782		$	1,023	$	10,150

INVENTORIES, NET (Tables)

12 Months Ended

Dec. 31, 2010

Inventories, net

Inventories, net, consist of the following:

	December 31,
(in thousands)	2010		2009

Finished goods	$	189,343	$	178,721
Work-in-process		57,272		53,056
Raw materials and supplies		62,123		59,863
	$	308,738	$	291,640

PROPERTY, PLANT AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2010

Property, plant and equipment, net

Property, plant and equipment, net, consist of the following:

	December 31,
(in thousands)	2010		2009
Assets, at cost:
Land	$	40,032	$	43,207
Buildings and improvements		304,341		295,297
Machinery and equipment		576,704		546,806
Construction in progress		20,639		18,610
		941,716		903,920
Less: Accumulated depreciation		518,611		464,301
Property, plant and equipment, net	$	423,105	$	439,619

GOODWILL AND INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2010

Net Carrying Values of Goodwill and Finite-Lived Identifiable Intangible Assets

The table below presents the net carrying values of goodwill and identifiable definite-lived intangible assets.

	December 31,
(in thousands)	2010		2009

Goodwill	$	1,303,055	$	1,312,596

Identifiable definite-lived intangible assets, net	$	78,743	$	89,086

Reconciliation of Changes in the Company's Goodwill

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

	December 31,
(in thousands)	2010			2009

Balance, beginning of the year	$	1,312,596		$	1,277,026
Acquisition activity		20,382			3,572
Changes to purchase price allocations		-			5,245
Effects of exchange rate changes		(29,923	)		26,753
Balance, end of the year	$	1,303,055		$	1,312,596

Goodwill by Reportable Segment

Goodwill by reportable segment is as follows:

	December 31,
(in thousands)	2010		2009

U.S., Germany and Certain Other
European Regions Consumable Businesses	$	249,522	$	252,538

France, U.K., Italy and Certain Other
European Countries, CIS, Middle East,
Africa, Pacific Rim Businesses		167,258		159,383

Canada/Latin America/Endodontics/
Orthodontics		282,321		267,427

Dental Laboratory Business/
Implants/Non-Dental		603,954		633,248

Total	$	1,303,055	$	1,312,596

Identifiable Definite-Lived Intangible Assets

Identifiable definite-lived intangible assets consist of the following:

	December 31, 2010							December 31, 2009
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
(in thousands)	Amount		Amortization			Amount		Amount		Amortization			Amount

Patents	$	21,956	$	(12,108	)	$	9,848	$	38,840	$	(25,842	)	$	12,998
Trademarks		68,344		(20,835	)		47,509		70,353		(17,939	)		52,414
Licensing agreements		28,509		(15,709	)		12,800		28,880		(14,138	)		14,742
Other		16,994		(8,408	)		8,586		15,364		(6,432	)		8,932
	$	135,803	$	(57,060	)	$	78,743	$	153,437	$	(64,351	)	$	89,086

ACCRUED LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2010

A reconciliation of Changes in the Company's Warranty liability

Accrued Liabilities

Accrued liabilities consist of the following:

	December 31,
(in thousands)	2010		2009

Payroll, commissions, bonuses, other cash compensation and employee benefits	$	61,334	$	60,083
General insurance		12,118		13,222
Sales and marketing programs		31,070		28,468
Professional and legal costs		10,844		10,248
Restructuring costs		9,191		9,966
Warranty liabilities		4,253		4,141
Deferred income		5,656		3,385
Accrued vacation and holidays		12,528		13,425
Third party royalties		9,184		9,806
Current portion of derivatives		27,668		59,250
Other		40,899		37,175
	$	224,745	$	249,169

A reconciliation of changes in the Company's warranty liability for 2010 and 2009 is as follows:

	December 31,
(in thousands)	2010			2009

Balance, beginning of the year	$	4,141		$	4,260
Accruals for warranties issued during the year		1,581			1,129
Accruals related to pre-existing warranties		103			-
Warranty settlements made during the year		(1,494	)		(1,295	)
Effects of exchange rate changes		(78	)		47
Balance, end of the year	$	4,253		$	4,141

FINANCING ARRANGEMENTS (Tables)

12 Months Ended

Dec. 31, 2010

Contractual Maturity Dates of Various Borrowings

Long-Term Borrowings

	December 31,
(in thousands)	2010		2009

Multi-currency revolving credit agreement expiring May 2013:
U.S. dollar denominated	$	2,123	$	3,967
Swiss francs 65 million		-		62,844
Private placement notes:
U.S. dollar denominated expiring March 2010 at 0.55%		-		150,000
U.S. dollar denominated expiring March 2016 at 4.11%		250,000		-
Term Loan Agreement:
Swiss francs denominated expiring March 2012 at 1.67%		69,560		-
Term Loan Agreement:
Japanese yen denominated expiring March 2012 at 0.91%		154,626		134,776
U.S. dollar commercial paper:
Facility rated A/2-P/2 U.S. dollar borrowings at 0.40%		119,500		85,200
Other borrowings, various currencies and rates		10,684		16,944
	$	606,493	$	453,731
Less: Current portion
(included in notes payable and current portion of long-term debt)		2,478		66,580
Long-term portion	$	604,015	$	387,151

The table below reflects the contractual maturity dates of the various borrowings at December 31, 2010. The borrowings under the commercial paper program are considered contractually due in 2013.

(in thousands)

2011	$	2,478
2012		159,459
2013		192,497
2014		75,718
2015		100,330
2016 and beyond		76,011
	$	606,493

EQUITY (Tables)

12 Months Ended

Dec. 31, 2010

Total Stock Based Compensation Expense and the Tax Related Benefit

Total Outstanding Shares

The following table represents total outstanding shares for the years ended December 31:

	Common		Treasury			Outstanding
(in thousands)	Shares		Shares			Shares

Balance at December 31, 2007		162,776		(11,954	)		150,822
Shares Issued		-		677			677
Repurchase of common stock at cost		- -		(2,971	)		(2,971	)

Balance at December 31, 2008		162,776		(14,248	)		148,528
Shares Issued		-		886			886
Repurchase of common stock at cost		- -		(2,453	)		(2,453	)

Balance at December 31, 2009		162,776		(15,815	)		146,961
Shares Issued		-		1,489			1,489
Repurchase of common stock at cost		- -		(6,715	)		(6,715	)

Balance at December 31, 2010		162,776		(21,041	)		141,735

The following table represents total stock based compensation expense and the tax related benefit for the years ended:

	December 31,
(in millions)	2010		2009		2008

Stock option expense	$	10.4	$	8.7	$	11.7
RSU expense		7.2		6.4		4.4
Total stock based compensation expense	$	17.6	$	15.1	$	16.1

Related deferred income tax benefit	$	4.9	$	3.6	$	3.9

Assumptions Used to Determine Compensation Cost for the Company's Non-qualified Stock Options Issued

The following table sets forth the assumptions used to determine compensation cost for the Company’s non-qualified stock options (“NQSO”) issued during the years ended:

	December 31,
	2010 (a)			2009			2008
Weighted average fair value per share	$	9.06		$	7.31		$	5.23
Expected dividend yield		0.58	%		0.60	%		0.69	%
Risk-free interest rate		2.55	%		2.14	%		1.85	%
Expected volatility		22	%		22	%		21	%
Expected life (years)		6.42			4.84			4.66

(a)

Summary of the Non-qualified Stock Option Transactions

The following table summarizes the non-qualified stock option transactions for the year ended December 31, 2010:

	Outstanding							Exercisable
				Weighted						Weighted
				Average		Aggregate				Average		Aggregate
				Exercise		Intrinsic				Exercise		Intrinsic
(in thousands, except per share amounts)	Shares			Price		Value		Shares		Price		Value
December 31, 2009		12,038		$	28.34	$	94,148		8,682	$	26.78	$	80,839
Granted		150			34.56
Exercised		(1,344	)		22.46
Forfeited		(208	)		33.15

December 31, 2010		10,636		$	29.07	$	66,722		8,815	$	28.58	$	61,450

Summary of Information about Non-qualified Stock Options Outstanding

The following table summarizes information about non-qualified stock options outstanding for the year ended December 31, 2010:

	Outstanding						Exercisable
			Weighted
	Number		Average				Number
	Outstanding		Remaining		Weighted		Exercisable		Weighted
	at		Contractual		Average		at		Average
Incremental Changes	December 31,		Life		Exercise		December 31,		Exercise
in Stock Price	2010		(in years)		Price		2010		Price
10.01 - - 15.00		30,600		0.5	$	13.61		30,600	$	13.61
15.01 - - 20.00		1,165,283		1.6		17.64		1,165,283		17.64
20.01 - - 25.00		1,037,798		3.1		22.17		1,019,398		22.17
25.01 - - 30.00		4,270,074		6.1		27.07		3,681,669		27.18
30.01 - - 35.00		2,844,220		7.6		32.81		1,749,067		32.19
35.01 - - 40.00		203,315		7.8		36.77		93,764		37.29
40.01 - - 45.00		37,774		7.2		41.16		28,587		41.19
45.01 - - 50.00		1,046,867		6.8		45.15		1,046,867		45.15

		10,635,931		5.8	$	29.07		8,815,235	$	28.58

Summary of the Unvested RSU Transactions

The following table summarizes the unvested RSU transactions for the year ended December 31, 2010:

	Unvested Restricted Stock Units
				Weighted Average
(in thousands, except per share amounts)				Grant Date
	Shares			Fair Value
Unvested at December 31, 2009		668		$	31.95
Granted		250			32.92
Exercised		(144	)		30.95
Forfeited		(30	)		32.86

Unvested at December 31, 2010		744		$	32.43

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2010

Components of Income Before Income Taxes from Operations

The components of income before income taxes from operations are as follows:

	December 31,
(in thousands)	2010		2009		2008

United States	$	104,424	$	99,009	$	45,171
Foreign		253,232		264,347		309,702
	$	357,656	$	363,356	$	354,873

Components of the Provision for Income Taxes from Operations

The components of the provision for income taxes from operations are as follows:

	December 31,
(in thousands)	2010			2009			2008

Current:
U.S. federal	$	21,848		$	30,851		$	(9,913	)
U.S. state		3,795			5,886			2,291
Foreign		62,196			52,012			65,854
Total	$	87,839		$	88,749		$	58,232

Deferred:
U.S. federal	$	3,067		$	(8,046	)	$	23,496
U.S. state		1,062			(476	)		3,283
Foreign		(2,743	)		8,717			(13,408	)
Total	$	1,386		$	195		$	13,371

	$	89,225		$	88,944		$	71,603

Reconciliation of the U.S. Federal Statutory Tax Rate to the Effective Rate

The reconciliation of the U.S. federal statutory tax rate to the effective rate for the years ended is as follows:

	December 31,
	2010			2009			2008

Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
Effect of:
State income taxes, net of federal benefit		0.9			1.0			1.0
Federal benefit of R&D and foreign tax credits		(6.9	)		(11.3	)		(15.8	)
Tax effect of international operations		(4.7	)		0.7			4.9
Net effect of tax audit activity		1.0			(1.3	)		(4.4	)
Tax effect of enacted statutory rate changes		-			-			0.1
Federal tax on unremitted earnings of certain
foreign subsidiaries		0.2			0.1			(0.3	)
Other		(0.5	)		0.3			(0.3	)

Effective income tax rate on operations		25.0	%		24.5	%		20.2	%

Tax Effect of Significant Temporary Differences Giving Rise to Deferred Tax Assets and Liabilities

The tax effect of significant temporary differences giving rise to deferred tax assets and liabilities are as follows:

	December 31, 2010					December 31, 2009
	Deferred			Deferred		Deferred			Deferred
	Tax			Tax		Tax			Tax
(in thousands)	Asset			Liability		Asset			Liability

Commission and bonus accrual	$	1,201		$	-	$	1,764		$	-
Employee benefit accruals		33,139			-		27,876			-
Inventory		17,497			-		15,554			-
Identifiable intangible assets		-			138,621		-			130,419
Insurance premium accruals		4,610			-		5,068			-
Miscellaneous accruals		7,088			-		8,529			-
Other		13,820			-		12,827			-
Unrealized losses included in other
comprehensive income		59,618			-		55,545			-
Property, plant and equipment		-			36,881		-			38,663
Product warranty accruals		901			-		980			-
R&D and foreign tax credit carryforward		34,844			-		35,609			-
Restructuring and other cost accruals		1,011			-		777			-
Sales and marketing accrual		4,545			-		4,553			-
Taxes on unremitted earnings of foreign subsidiaries		-			2,083		-			1,486
Tax loss carryforwards and other tax attributes		94,286			-		70,010			-
Valuation allowance		(75,392	)		- -		(51,809	)		- -
	$	197,168		$	177,585	$	187,283		$	170,568

Deferred Tax Assets and Liabilities Included in the Consolidated Balance Sheet

The deferred tax assets and liabilities are included in the following consolidated balance sheet line items:

	December 31,
(in thousands)	2010		2009

Prepaid expenses and other current assets	$	55,747	$	77,277
Income taxes payable		3,004		1,747
Other noncurrent assets		39,329		13,709
Deferred income taxes		72,489		72,524

Unrecognized Tax Benefits

The Company had the following activity recorded for unrecognized tax benefits:

	December 31,
(in thousands)	2010			2009			2008

Unrecognized tax benefits at beginning of period	$	12,864		$	17,285		$	36,307
Gross change for prior period positions		47			(5,120	)		(10,154	)
Gross change for current year positions		1,036			1,630			785
Decrease due to settlements and payments		-			(255	)		(2,584	)
Decrease due to statute expirations		(424	)		(1,026	)		(5,752	)
Increase due to effect of foreign currency translation		-			350			-
Decrease due to effect from foreign currency translation		(380	)		- -			(1,317	)

Unrecognized tax benefits at end of period	$	13,143		$	12,864		$	17,285

BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2010

Reconciliations of Changes in the Defined Benefit and Postretirement Healthcare Plans' Benefit Obligations, Fair Value of Assets and Statement of Funded Status

Reconciliations of changes in the defined benefit and postretirement healthcare plans’ benefit obligations, fair value of assets and statement of funded status are as follows:

							Other Postretirement
	Pension Benefits						Benefits
	December 31,						December 31,
(in thousands)	2010			2009			2010			2009

Change in Benefit Obligation
Benefit obligation at beginning of year	$	191,976		$	183,785		$	11,666		$	10,501
Service cost		8,108			8,375			58			50
Interest cost		8,415			8,003			605			676
Participant contributions		2,886			2,774			616			689
Actuarial losses (gains)		7,976			(7,202	)		(548	)		1,018
Amendments		-			(29	)		-			-
Divestitures		291			286			-			-
Effects of exchange rate changes		3,474			4,929			-			-
Settlement gains		-			(808	)		-			-
Benefits paid		(11,622	)		(8,137	)		(790	)		(1,268	)

Benefit obligation at end of year	$	211,504		$	191,976		$	11,607		$	11,666

Change in Plan Assets
Fair value of plan assets at beginning of year	$	88,866		$	75,986		$	-		$	-
Actual return on assets		1,883			5,687			-			-
Settlement gains		-			-			-			-
Effects of exchange rate changes		8,374			2,474			-			-
Employer contributions		9,159			10,082			174			579
Participant contributions		2,886			2,774			616			689
Benefits paid		(11,622	)		(8,137	)		(790	)		(1,268	)
Fair value of plan assets at end of year	$	99,546		$	88,866		$	- -		$	- -

Funded status at end of year	$	(111,958	)	$	(103,110	)	$	(11,607	)	$	(11,666	)

Amounts Recognized in the Accompanying Consolidated Balance Sheets, Net of Tax Effects

The amounts recognized in the accompanying consolidated balance sheets, net of tax effects, are as follows:

							Other Postretirement
	Pension Benefits						Benefits
	December 31,						December 31,
(in thousands)	2010			2009			2010			2009

Other noncurrent assets	$	-		$	1		$	-		$	-
Deferred tax asset		9,834			7,177			1,113			1,427
Total assets	$	9,834		$	7,178		$	1,113		$	1,427

Current liabilities		(3,462	)		(3,604	)		(1,099	)		(1,107	)
Long-term liabilities		(108,496	)		(99,507	)		(10,508	)		(10,559	)
Deferred tax liability		(22	)		(238	)		- -			- -
Total liabilities	$	(111,980	)	$	(103,349	)	$	(11,607	)	$	(11,666	)

Accumulated other comprehensive income		29,050			20,504			1,771			2,270

Net amount recognized	$	(73,096	)	$	(75,667	)	$	(8,723	)	$	(7,969	)

Amounts Recognized in Accumulated Other Comprehensive Income

Amounts recognized in AOCI consist of:

					Other Postretirement
	Pension Benefits				Benefits
	December 31,				December 31,
(in thousands)	2010		2009		2010		2009

Net actuarial loss	$	38,694	$	27,056	$	2,884	$	3,697
Net prior service cost		168		262		-		-
Net transition obligation		- -		125		- -		- -
Pretax AOCI	$	38,862	$	27,443	$	2,884	$	3,697
Less deferred taxes		9,812		6,939		1,113		1,427
Post tax AOCI	$	29,050	$	20,504	$	1,771	$	2,270

Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets

Information for pension plans with an accumulated benefit obligation in excess of plan assets:

	December 31,
(in thousands)	2010		2009

Projected benefit obligation	$	211,504	$	191,785
Accumulated benefit obligation		200,574		182,594
Fair value of plan assets		99,546		88,674

Components of Net Periodic Benefit Cost

Components of net periodic benefit cost:

										Other Postretirement
	Pension Benefits									Benefits
(in thousands)	2010			2009			2008			2010		2009		2008

Service cost	$	8,108		$	8,375		$	6,980		$	58	$	50	$	50
Interest cost		8,415			8,003			7,910			605		676		635
Expected return on assets		(4,662	)		(3,991	)		(4,458	)		-		-		-
Amortization of actuarial losses		124			240			240			-		-		-
Amortization of prior service		86			138			141			-		-		-
Amortization of net loss		1,002			1,652			155			265		281		168
Settlement gains		- -			(1,148	)		(2,259	)		- -		- -		- -
Net periodic benefit cost	$	13,073		$	13,269		$	8,709		$	928	$	1,007	$	853

Other Changes in Plan Assets and Benefit Obligations Recognized in AOCI

Other changes in plan assets and benefit obligations recognized in AOCI:

										Other Postretirement
	Pension Benefits									Benefits
(in thousands)	2010			2009			2008			2010			2009			2008

Net actuarial (gain) loss	$	12,640		$	(7,994	)	$	26,214		$	(548	)	$	1,020		$	670
Net prior service (credit)		(8	)		(37	)		(3	)		-			-			-
Net transition obligation		(1	)		1			32			-			-			-
Amortization		(1,212	)		(2,030	)		(536	)		(265	)		(281	)		(168	)
Total recognized in AOCI	$	11,419		$	(10,060	)	$	25,707		$	(813	)	$	739		$	502
Total recognized in net periodic benefit cost and AOCI	$	24,493		$	3,209		$	34,416		$	114		$	1,746		$	1,355

Amounts in AOCI that are Expected to be Amortized as Net Expense (Income) During Next Fiscal Year

The amounts in AOCI that are expected to be amortized as net expense (income) during fiscal year 2011 are as follows:

			Other
	Pension		Postretirement
(in thousands)	Benefits		Benefits

Amount of net transition obligation (asset)	$	-	$	-
Amount of net prior service cost		0.1		-
Amount of net loss		1.5		0.2

Weighted Average Assumptions Used to Determine Benefit Obligations, Principally in Foreign Locations

The weighted average assumptions used to determine benefit obligations for the Company's plans, principally in foreign locations, are as follows:

										Other Postretirement
	Pension Benefits									Benefits
	2010			2009			2008			2010			2009			2008
Discount rate		4.1	%		4.7	%		4.5	%		5.0	%		5.5	%		6.3	%
Rate of compensation increase		2.6	%		2.7	%		2.7	%		n/a			n/a			n/a
Health care cost trend		n/a			n/a			n/a			8.0	%		8.5	%		9.0	%
Ultimate health care cost trend		n/a			n/a			n/a			5.0	%		5.0	%		5.0	%
Years until ultimate trend is reached		n/a			n/a			n/a			7.0			8.0			9.0

Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost

The weighted average assumptions used to determine net periodic benefit cost for the Company's plans, principally in foreign locations, are as follows:

										Other Postretirement
	Pension Benefits									Benefits
	2010			2009			2008			2010			2009			2008
Discount rate		4.7	%		4.5	%		5.0	%		5.5	%		6.3	%		6.3	%
Expected return on plan assets		5.2	%		5.2	%		5.4	%		n/a			n/a			n/a
Rate of compensation increase		2.7	%		2.7	%		2.8	%		n/a			n/a			n/a
Health care cost trend		n/a			n/a			n/a			8.0	%		8.5	%		9.0	%
Ultimate health care cost trend		n/a			n/a			n/a			5.0	%		5.0	%		5.0	%
Years until ultimate trend is reached		n/a			n/a			n/a			7.0			8.0			9.0

Measurement Date	12/31/2010			12/31/2009			12/31/2008			12/31/2010			12/31/2009			12/31/2008

Effect of One Percentage Point in Assumed Healthcare Cost Trend Rates

	Other Postretirement
	Benefits
(in thousands)	1% Increase		1% Decrease

Effect on total of service and interest cost components	$	59	$	(49	)
Effect on postretirement benefit obligation		988		(845	)

Fair Value Measurements of Plan Assets

	December 31, 2010
(in thousands)	Total		Level 1		Level 2		Level 3
Assets Category
Cash and cash equivalents	$	3,028	$	2,775	$	253	$	-
Equity securities:
U. S.		1,103		1,103		-		-
International		29,944		29,944		-		-
Fixed income securities:
Fixed rate bonds (a)		41,215		41,215		-		-
Other types of investments:
Mutual funds (b)		8,857		417		8,440		-
Common trusts (c)		1,648		-		-		1,648
Insurance contracts		4,858		-		3,034		1,824
Hedge funds		1,334		-		-		1,334
Real estate		7,559		7,199		- -		360
Total	$	99,546	$	82,653	$	11,727	$	5,166

	December 31, 2009
(in thousands)	Total		Level 1		Level 2		Level 3
Assets Category
Cash and cash equivalents	$	3,180	$	3,038	$	142	$	-
Equity securities:
U. S.		954		954		-		-
International		27,907		27,907		-		-
Fixed income securities:
Fixed rate bonds (a)		35,350		35,350		-		-
Other types of investments:
Mutual funds (b)		7,872		-		7,872		-
Common trusts (c)		1,932		90		-		1,842
Insurance contracts		4,567		-		2,825		1,742
Hedge funds		1,672		-		-		1,672
Real estate		5,432		5,107		- -		325
Total	$	88,866	$	72,446	$	10,839	$	5,581

(a)	This category includes fixed income securities invested primarily in Swiss bonds, foreign bonds in Swiss currency, foreign currency bonds, mortgage notes and pledged letters.

(b)	Mutual funds balanced between moderate-income generation and moderate capital appreciation with investments allocation of approximately 50% equities and 50% fixed income investments.

(c)	This category includes common/collective funds with investments in approximately 65% equities and 35% in fixed income investments.

Reconciliation for the Plans Assets Categorized as Level 3

	Changes within Level 3 Category for
	Year Ended December 31, 2010
	Common			Insurance			Hedge			Real
(in thousands)	Trust			Contracts			Funds			Estate		Total
Beginning balance at December 31, 2009	$	1,842		$	1,742		$	1,672		$	325	$	5,581

Actual return on plan assets:
Relating to assets still held at the reporting date		116			29			37			-		182
Relating to assets sold during the period		46			-			-			-		46
Purchases, sales and settlements		(356	)		109			(541	)		-		(788	)
Effects of exchange rate changes		-			(56	)		166			35		145
Ending balance at December 31, 2010	$	1,648		$	1,824		$	1,334		$	360	$	5,166

	Changes within Level 3 Category for
	Year Ended December 31, 2009
	Common		Insurance		Hedge			Real
(in thousands)	Trust		Contracts		Funds			Estate		Total
Beginning balance at December 31, 2008	$	1,233	$	1,578	$	1,002		$	314	$	4,127

Actual return on plan assets:
Relating to assets still held at the reporting date		239		31		(224	)		-		46
Relating to assets sold during the period		16		-		-			-		16
Purchases, sales and settlements		354		89		832			-		1,275
Effects of exchange rate changes		- -		44		62			11		117
Ending balance at December 31, 2009	$	1,842	$	1,742	$	1,672		$	325	$	5,581

Estimated Future Benefit Payments

(in thousands)	Pension Benefits		Other Postretirement Benefits
2011	$	8,368	$	1,099
2012		8,656		1,124
2013		9,569		1,080
2014		10,140		1,046
2015		10,058		978
2016-2019		59,982		4,149

RESTRUCTURING AND OTHER COSTS (Tables)

12 Months Ended

Dec. 31, 2010

Cumulative Amounts for the Provisions and Adjustments and Amounts Applied for All the Plans by Segment

Restructuring Accruals

As of December 31, 2010, the Company’s restructuring accruals were as follows:

	Severances
	2008 and
(in thousands)	Prior Plans			2009 Plans			2010 Plans			Total

Balance, December 31, 2009	$	5,505		$	3,240		$	-		$	8,745
Provisions and adjustments		(700	)		(514	)		6,552			5,338
Amounts applied		(2,780	)		(1,873	)		(1,292	)		(5,945	)
Balance, December 31, 2010	$	2,025		$	853		$	5,260		$	8,138

	Lease/contract terminations
	2008 and
(in thousands)	Prior Plans			Total

Balance, December 31, 2009	$	1,093		$	1,093
Provisions and adjustments		-			-
Amounts applied		(97	)		(97	)
Balance, December 31, 2010	$	996		$	996

	Other restructuring costs
	2008 and
(in thousands)	Prior Plans			2009 Plans			2010 Plans			Total

Balance, December 31, 2009	$	112		$	16		$	-		$	128
Provisions and adjustments		90			209			206			505
Amounts applied		(161	)		(209	)		(206	)		(576	)
Balance, December 31, 2010	$	41		$	16		$	-		$	57

The following table provides the cumulative amounts for the provisions and adjustments and amounts applied for all the plans by segment:

	December 31,		Provisions		Amounts			December 31,
(in thousands)	2009		and adjustments		applied			2010

U.S., Germany and Certain Other European Regions Consumable Businesses	$	1,247	$	405	$	(561	)	$	1,091

France, U.K., Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses		84		422		(391	)		115

Canada/Latin America/Endodontics/ Orthodontics		638		582		(820	)		400

Dental Laboratory Business/ Implants/Non-Dental		7,997		4,434		(4,846	)		7,585
Total Balance	$	9,966	$	5,843	$	(6,618	)	$	9,191

FINANCIAL INSTRUMENTS AND DERIVATIVES (Tables)

12 Months Ended

Dec. 31, 2010

Fair Value of Cash Flow Hedges

The following tables summarize the fair value of the Company’s cash flow hedges at December 31, 2010.

Foreign Exchange Forward Contracts	Notional Amounts						Fair Value Net Asset (Liability)
(in thousands)	2010			2011			December 31, 2010

Forward sale, 11.2 million Australian dollars	$	10,460		$	972		$	(784	)
Forward purchase, 8.4 million British pounds		(12,286	)		(772	)		250
Forward sale, 34.3 million Canadian dollars		31,114			3,428			(664	)
Forward sale, 5.2 million Danish krone		925			-			10
Forward sale, 5.2 million euros		6,923			-			1,916
Forward sale, 407.5 million Japanese yen		5,019			-			268
Forward sale, 118.7 million Mexican pesos		9,615			-			12
Forward purchase, 1.5 million Norwegian krone		(262	)		-			1
Forward sale, 2.0 million Singapore dollars		1,585			-			(10	)
Forward sale, 527.9 million South Korean won		509			-			(3	)
Forward purchase, 11.5 million Swiss francs		(12,324	)		-			423
Forward sale, 23.6 million Taiwanese dollars		805			- -			4

Total foreign exchange forward contracts	$	42,083		$	3,628		$	1,423

	Notional Amount										Fair Value Net Asset (Liability)
Interest Rate Swaps (in thousands)	2011		2012		2013		2014		2015 and Beyond		December 31, 2010

Euro	$	1,262	$	1,262	$	1,262	$	965	$	3,136	$	(660	)
Japanese yen		-		154,626		-		-		-		(2,058	)
Swiss francs		- -		69,560		- -		- -		- -		(3,026	)
Total interest rate swaps	$	1,262	$	225,448	$	1,262	$	965	$	3,136	$	(5,744	)

	Notional Amount			Fair Value Net Asset (Liability)
Commodity Contracts (in thousands)	2011			December 31, 2010

Silver swap - U.S. dollar	$	(93	)	$	82
Platinum swap - U.S. dollar		(470	)		6
Total commodity contracts	$	(563	)	$	88

Fair Value of Cross Currency Basis Swaps that are Designated as Hedges of Net Investments in Foreign Operations

The following table summarizes the fair value of the Company’s cross currency basis swaps that are designated as hedges of net investments in foreign operations at December 31, 2010:

	Notional Amount						Fair Value Net Asset (Liability)
Cross Currency Basis Swaps (in thousands)	2011		2012		2013		December 31, 2010

Swiss franc 592.5 million @ 1.17 pay CHF 3 mth. LIBOR rec. USD 3 mth. LIBOR	$	86,040	$	60,570	$	487,455	$	(126,987	)
Euro 358.0 million @ $1.22 pay EUR 3 mth. EURIBOR rec. USD 3 mth. LIBOR		- -		- -		478,360		(42,118	)
Total cross currency basis swaps	$	86,040	$	60,570	$	965,815	$	(169,105	)

Fair Value and Location on the Consolidated Balance Sheets of the Company's Derivatives

The following tables summarize the fair value and location on the consolidated balance sheets of the Company’s derivatives at:

	December 31, 2010
	Prepaid
(in thousands)	Expenses		Other				Other
	and Other		Noncurrent		Accrued		Noncurrent
Designated as Hedges	Current Assets		Assets, Net		Liabilities		Liabilities

Foreign exchange forward contracts	$	2,455	$	21	$	1,139	$	135
Commodity contracts		88		-		-		-
Interest rate swaps		-		-		4,213		871
Cross currency basis swaps		- -		- -		21,516		147,589
Total	$	2,543	$	21	$	26,868	$	148,595

Not Designated as Hedges

Foreign exchange forward contracts	$	821	$	-	$	600	$	-
Interest rate swaps		- -		- -		104		556
Total	$	821	$	-	$	704	$	556

	December 31, 2009
	Prepaid
(in thousands)	Expenses		Other				Other
	and Other		Noncurrent		Accrued		Noncurrent
Designated as Hedges	Current Assets		Assets, Net		Liabilities		Liabilities

Foreign exchange forward contracts	$	598	$	5	$	1,010	$	16
Commodity contracts		293		-		-		-
Interest rate swaps		-		-		6,130		2,775
Cross currency basis swaps		- -		- -		52,411		124,210
Total	$	891	$	5	$	59,551	$	127,001

Not Designated as Hedges

Foreign exchange forward contracts	$	556	$	-	$	409	$	-
Interest rate swaps		- -		- -		- -		882
Total	$	556	$	-	$	409	$	882

Impact of the Company's Cash Flow Hedges

The following tables summarize the statements of operations impact of the Company’s cash flow hedges for the years ended December 31, 2010 and 2009:

December 31, 2010

Derivatives in Cash Flow Hedging					Effective Portion
	Gain (Loss)			Classification	Reclassified from
(in thousands)	in AOCI			of Gains (Losses)	AOCI into Income
Interest rate contracts	$	(1,978	)	Interest expense	$	(5,636	)
Foreign exchange forward contracts		2,314		Cost of products sold		665
Foreign exchange forward contracts		670		SG&A expenses		630
Commodity contracts		324		Cost of products sold		662
Total	$	1,330			$	(3,679	)

Derivatives in Cash Flow Hedging		Ineffective portion
	Classification	Recognized
(in thousands)	of Gains (Losses)	in Income
Interest rate contracts	Other expense, net	$	232
Foreign exchange forward contracts	Interest expense		(658	)
Foreign exchange forward contracts	Interest expense		(14	)
Commodity contracts	Interest expense		(14	)
Total		$	(454	)

December 31, 2009

Derivatives in Cash Flow Hedging					Effective Portion
	Gain (Loss)			Classification	Reclassified from
(in thousands)	in AOCI			of Gains (Losses)	AOCI into Income
Interest rate contracts	$	(4,186	)	Interest expense	$	(8,035	)
Foreign exchange forward contracts		(999	)	Cost of products sold		905
Foreign exchange forward contracts		660		SG&A expenses		459
Commodity contracts		1,655		Cost of products sold		(1,149	)
Total	$	(2,870	)		$	(7,820	)

Derivatives in Cash Flow Hedging		Ineffective portion
	Classification	Recognized
(in thousands)	of Gains (Losses)	in Income
Interest rate contracts	Other expense, net	$	(168	)
Foreign exchange forward contracts	Interest expense		(330	)
Foreign exchange forward contracts	Interest expense		(40	)
Commodity contracts	Interest expense		(48	)
Total		$	(586	)

Impact of the Company's Hedges of Net Investments

The following tables summarize the statement of operations impact of the Company’s hedges of net investments for the years ended December 31, 2010 and 2009:

December 31, 2010

Derivatives in Net Investment Hedging					Gain (Loss)
	Gain (Loss)			Classification	Recognized
(in thousands)	in AOCI			of Gains (Losses)	in Income
Cross currency interest rate swaps	$	(61,211	)	Interest income	$	869
				Interest expense		(105	)
Cross currency interest rate swaps		34,862		Interest expense		(2,508	)
Total	$	(26,349	)		$	(1,744	)

December 31, 2009

Derivatives in Net Investment Hedging					Gain (Loss)
	Gain (Loss)			Classification	Recognized
(in thousands)	in AOCI			of Gains (Losses)	in Income
Cross currency interest rate swaps	$	(13,877	)	Interest income	$	1,420
				Interest expense		(85	)
Cross currency interest rate swaps		(13,868	)	Interest expense		(4,098	)
Total	$	(27,745	)		$	(2,763	)

Impact of the Company's Hedges Not Designated as Hedging

The following table summarizes the statement of operations impact of the Company’s hedges not designated as hedging for the years ended December 31, 2010 and 2009:

Derivatives Not Designated as Hedging
	Classification	December 31,
(in thousands)	of Gains (Losses)	2010			2009
Foreign exchange forward contracts	Other expense, net	$	1,181		$	(14,984	)
Interest rate contracts	Other expense, net		-			(2	)
Interest rate contracts	Interest expense		(155	)		(514	)
Total		$	1,026		$	(15,500	)

Amounts Recorded in AOCI Related to Cash Flow Hedging Instruments

Amounts recorded in AOCI related to cash flow hedging instruments at:

	December 31,
(in thousands, net of tax)	2010			2009

Beginning balance	$	(4,799	)	$	(7,874	)

Changes in fair value of derivatives		1,248			(1,627	)
Reclassifications to earnings from equity		2,083			4,702
Total activity		3,331			3,075

Ending balance	$	(1,468	)	$	(4,799	)

Amounts recorded in AOCI related to hedges of net investments in foreign operations at:

	December 31,
(in thousands, net of tax)	2010			2009

Beginning balance	$	111,115		$	77,584

Foreign currency translation adjustment		(33,208	)		49,685
Changes in fair value of:
foreign currency debt		(16,311	)		881
derivative hedge instruments		(16,179	)		(17,035	)
Total activity		(65,698	)		33,531

Ending balance	$	45,417		$	111,115

FAIR VALUE MEASUREMENT (Tables)

12 Months Ended

Dec. 31, 2010

Financial Assets and Liabilities that are Recorded at Fair Value and Classified Based on the Lowest Level of Input

	December 31, 2010
(in thousands)	Total		Level 1		Level 2		Level 3

Assets
Money market funds	$	380,593	$	380,593	$	-	$	-
Commodity forward purchase contracts		88		-		88		-
Foreign exchange forward contracts		3,297		-		3,297		-
Corporate convertible bonds		66,024		- -		- -		66,024
Total assets	$	450,002	$	380,593	$	3,385	$	66,024

Liabilities
Interest rate swaps	$	5,744	$	-	$	5,744	$	-
Cross currency interest rate swaps		169,105		-		169,105		-
Foreign exchange forward contracts		1,874		- -		1,874		- -
Total liabilities	$	176,723	$	-	$	176,723	$	-

	December 31, 2009
(in thousands)	Total		Level 1		Level 2		Level 3

Assets
Money market funds	$	364,765	$	364,765	$	-	$	-
Interest rate swaps		293		-		293		-
Foreign exchange forward contracts		1,159		-		1,159		-
Total assets	$	366,217	$	364,765	$	1,452	$	-

Liabilities
Interest rate swaps	$	9,787	$	-	$	9,787	$	-
Cross currency interest rate swaps		176,621		-		176,621		-
Commodity forward purchase contracts		1,435		-		1,435		-
Total liabilities	$	187,843	$	-	$	187,843	$	-

Reconciliation of the Company's Assets Measured at Fair Value on a Recurring Basis Using Unobservable Inputs (Level 3):

The following table presents a reconciliation of the Company’s assets measured at fair value on a recurring basis using unobservable inputs (Level 3):

(in thousands)
	Level 3
Balance, December 31, 2009	$	-
Purchases, gross		49,654
Sales, gross		-
Gains and (losses):
Reported in AOCI - corporate convertible bonds		16,370
Balance, December 31, 2010	$	66,024

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2010

Allowance for Doubtful Accounts

Rental commitments

Rental commitments, principally for real estate (exclusive of taxes, insurance and maintenance), automobiles and office equipment are as follows:

(in thousands)

2011	$	25,778
2012		17,295
2013		10,262
2014		7,259
2015		4,848
2016 and thereafter		9,072
	$	74,514

Disclosure - Schedule II Valuation and Qualifying Accounts (Detail) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

Additions - Charged (Credited) To Costs And Expenses

$ 12,235

$ 18,849

$ 18,578

(233)

(3,124)

^[1]

3,674

Additions - Charged to Other Accounts

111

(348)

(2,611)

(4,253)

(1,705)

(682)

746

(1,350)

Reserve for Cash Discount

8,820

12,235

18,849

Additions - Charged (Credited) To Costs And Expenses

1,103

519

307

655

505

267

Additions - Charged to Other Accounts

(970)

(59)

Inventory Valuation Reserve

809

1,103

519

Additions - Charged (Credited) To Costs And Expenses

31,932

28,389

26,190

6,590

5,883

3,261

Additions - Charged to Other Accounts

760

1,938

(3,652)

(3,610)

(1,981)

(161)

1,190

(1,019)

Valuation Allowance of Deferred Tax Assets

35,469

31,932

28,389

Additions - Charged (Credited) To Costs And Expenses

51,809

36,741

50,250

29,642

13,419

603

^[2]

(13,203)

(6,059)

1,649

(909)

Entity-Wide Revenue, Major Customer [Line Items]

$ 75,392

$ 51,809

$ 36,741

[1]	See Note 1, Significant Accounting Policies, to the consolidated financial statements, for further discussion.
[2]	The write-offs during 2008 are the result of a global tax restructuring project, tax audit closures, and expired tax losses.

Significant Accounting Policies - Additional Information (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2010 USD ($) Year	Dec. 31, 2009 USD ($)	Dec. 31, 2008 USD ($)
Significant Accounting Policies [Line Items]
Cost of inventories determined by LIFO method	$ 6,900	$ 7,800
Cost of inventories determined by LIFO method, percentage of total inventories	2.20%	2.70%
Cost of inventories determined by LIFO method, amount of increase if FIFO method was used	$ 4,900	$ 4,000
Foreign currency translation adjustments, gains	294,600	327,800
Foreign currency translation adjustments, losses	124,000	107,700
Foreign currency translation adjustments recorded in AOCI net of tax effects	(54,111)	53,574	$ (71,458)
Net exchange gains(losses)	(3,300)	300	(8,900)
R&D costs included in selling, general and administrative expenses	49,400	50,300	48,500
Precious metal content of sales	189,257	168,712	199,923
Accumulated Translation Adjustment
Significant Accounting Policies [Line Items]
Foreign currency translation adjustments recorded in AOCI net of tax effects	158,700	143,000	138,500
Foreign currency translation adjustments recorded in AOCI net of tax effects	(16,300)	900
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges
Significant Accounting Policies [Line Items]
Foreign currency translation adjustments recorded in AOCI net of tax effects	(33,200)	49,700
Precious Metal Content
Significant Accounting Policies [Line Items]
Precious metal content of sales	$ 189,200	$ 168,700	$ 200,000
Dental Products
Significant Accounting Policies [Line Items]
Percentage of sales, professional dental products	97.00%	97.00%	97.00%
Building
Significant Accounting Policies [Line Items]
Estimated useful life (in years)	P40Y
Machinery and Equipment
Significant Accounting Policies [Line Items]
Estimated useful life, minimum (in years) \| Year	4
Estimated useful life, maximum (in years) \| Year	15
Trade Accounts Receivable
Significant Accounting Policies [Line Items]
Allowance for doubtful accounts	$ 8,800	$ 12,200
Write-off of Provision for doubtful accounts	2,600	4,300
Provision for doubtful accounts	200	3,100
Notes Receivable
Significant Accounting Policies [Line Items]
Allowance for doubtful accounts	800	1,100
Provision for doubtful accounts	700	$ 500
Write-off of Provision for doubtful accounts	$ 1,000

Balances included in AOCI in the Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands	Dec. 31, 2010	Dec. 31, 2009
Accumulated Other Comprehensive Income (Loss) [Line Items]
Foreign currency translation adjustments	$ 170,597	$ 220,116
Net loss on derivative financial instruments	(126,648)	(113,800)
Net unrealized holding gain on available for-sale securities	11,029
Pension liability adjustments	(30,822)	(22,774)
Accumulated Other Comprehensive Income (Loss), Net of Tax, Total	$ 24,156	$ 83,542

Computation of Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items]
Basic	$ 1.85	$ 1.85	$ 1.90
Diluted	$ 1.82	$ 1.83	$ 1.87
Basic	143,980	148,319	149,069
Incremental shares from assumed exercise of dilutive options	2,005	1,783	2,610
Diluted	145,985	150,102	151,679
Basic	$ 265,708	$ 274,258	$ 283,869
Diluted	$ 265,708	$ 274,258	$ 283,869

Earnings per Common Share - Additional Information (Detail) - shares shares in Millions	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock options not included in the computation of diluted earnings per common share	3.1	2.9	1.6

Business Acquisitions - Additional Information (Detail) $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 09, 2010 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2008 USD ($)
Business Acquisition [Line Items]
Acquisition related activity, net of cash acquired		$ 35,556	$ 2,986	$ 117,300
Purchase of convertible debt issued by affiliate	$ 49,654	49,654
Net unrealized holding gains on available-for-sale investments		11,029
Additional earn-out payments paid as a result of the combination, not included as part of the acquisition cost		5,100
Business acquisitions, goodwill assigned to company's reporting segments		20,400
US, Germany and Certain Other European Regions Consumable Businesses
Business Acquisition [Line Items]
Business acquisitions, goodwill assigned to company's reporting segments		1,500
Canada, Latin America, Endodontics, Orthodontics
Business Acquisition [Line Items]
Business acquisitions, goodwill assigned to company's reporting segments		12,700
Dental Laboratory Business, Implants, Non Dental
Business Acquisition [Line Items]
Business acquisitions, goodwill assigned to company's reporting segments		6,200
Other intangibles
Business Acquisition [Line Items]
Business acquisitions, amortizable intangible assets		$ 700
Business acquisitions, amortizable intangible assets		5
DIO Corporation
Business Acquisition [Line Items]
Initial ownership interest	16.00%
Noncurrent Assets
Business Acquisition [Line Items]
Available-for-sale securities, amortized cost of DIO bond		$ 49,700
Available-for-sale securities, fair value of DIO bond		$ 66,000
Corporate Bond Securities
Business Acquisition [Line Items]
Contractual maturity date		Dec. 31, 2015
Acquisitions, 2005 and 2007 \| Lower limit
Business Acquisition [Line Items]
Additional earn-out payments, term		2 years
Acquisitions, 2005 and 2007 \| Upper limit
Business Acquisition [Line Items]
Additional earn-out payments, term		3 years

Aggregate Purchase Price Allocation for Acquisitions Based on Final Estimates of Fair Value (Detail) $ in Thousands	Dec. 31, 2010 USD ($)
Business Acquisition [Line Items]
Current assets	$ 10,755
Property, plant and equipment	1,255
Identifiable intangible assets and goodwill	21,055
Other long-term assets	28
Total assets	33,093
Current liabilities	(12,495)
Long-term liabilities	(1,283)
Total liabilities	(13,778)
Net assets	$ 19,315

Net Sales (Detail) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

US, Germany and Certain Other European Regions Consumable Businesses

$ 2,221,014

$ 2,159,378

$ 2,191,465

Entity-Wide Revenue, Major Customer [Line Items]

France, UK, Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses

526,781

526,668

459,678

Entity-Wide Revenue, Major Customer [Line Items]

482,146

471,232

487,126

Entity-Wide Revenue, Major Customer [Line Items]

665,032

621,256

632,151

Entity-Wide Revenue, Major Customer [Line Items]

550,359

543,637

618,077

Entity-Wide Revenue, Major Customer [Line Items]

Entity-Wide Disclosure on Geographic Areas, Revenue from External Customers Attributed to Individual Foreign Countries [Line Items]

^[1]

$ (3,304)

$ (3,415)

$ (5,567)

[1]	Includes amounts recorded at Corporate headquarters.

Net Sales, Excluding Precious Metal Content (Detail) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

Precious metal content of sales

$ 2,031,757

$ 1,990,666

$ 1,991,542

189,257

168,712

199,923

US, Germany and Certain Other European Regions Consumable Businesses

2,221,014

2,159,378

2,191,465

Entity-Wide Disclosure on Geographic Areas, Revenue from External Customers Attributed to Individual Foreign Countries [Line Items]

526,781

526,668

459,678

France, UK, Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses

526,781

526,668

459,678

Entity-Wide Disclosure on Geographic Areas, Revenue from External Customers Attributed to Individual Foreign Countries [Line Items]

445,627

436,790

456,192

482,146

471,232

487,126

Entity-Wide Disclosure on Geographic Areas, Revenue from External Customers Attributed to Individual Foreign Countries [Line Items]

662,556

618,414

628,887

665,032

621,256

632,151

Entity-Wide Disclosure on Geographic Areas, Revenue from External Customers Attributed to Individual Foreign Countries [Line Items]

400,097

412,209

452,352

550,359

543,637

618,077

Entity-Wide Disclosure on Geographic Areas, Revenue from External Customers Attributed to Individual Foreign Countries [Line Items]

^[1]

(3,304)

(3,415)

(5,567)

Segment Reporting, Revenue Reconciling Item [Line Items]

^[2]

$ (3,304)

$ (3,415)

$ (5,567)

[1]	(b) Includes results of Corporate headquarters and one distribution warehouse not managed by named segments.
[2]	Includes amounts recorded at Corporate headquarters.

Intersegment Net Sales (Detail) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

Eliminations

$ (540,766)

$ (511,989)

$ (552,843)

Total

US, Germany and Certain Other European Regions Consumable Businesses

Segment Reporting, Revenue Reconciling Item [Line Items]

France, UK, Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses

116,440

104,328

130,463

Segment Reporting, Revenue Reconciling Item [Line Items]

17,103

13,202

15,941

Segment Reporting, Revenue Reconciling Item [Line Items]

115,158

103,329

106,031

Segment Reporting, Revenue Reconciling Item [Line Items]

112,285

114,591

123,157

Segment Reporting, Revenue Reconciling Item [Line Items]

Reconciliation of Depreciation by Segment [Line Items]

^[1]

$ 179,780

$ 176,539

$ 177,251

[1]	Includes amounts recorded at Corporate headquarters.

Depreciation and Amortization (Detail) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

US, Germany and Certain Other European Regions Consumable Businesses

$ 66,340

$ 65,175

$ 56,929

Reconciliation of Depreciation by Segment [Line Items]

France, UK, Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses

16,315

14,945

12,807

Reconciliation of Depreciation by Segment [Line Items]

3,939

3,884

3,188

Reconciliation of Depreciation by Segment [Line Items]

18,419

16,978

17,179

Reconciliation of Depreciation by Segment [Line Items]

20,479

21,461

16,062

Reconciliation of Depreciation by Segment [Line Items]

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

^[1]

$ 7,188

$ 7,907

$ 7,693

[1]	Includes amounts recorded at Corporate headquarters.

Segment Operating Income (Detail) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

Income before income taxes

$ 391,257

$ 388,133

$ 412,816

357,656

363,356

354,873

Restructuring and other costs

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

10,984

6,890

32,355

Interest Expense

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

25,089

21,896

32,527

Interest income

Other expense (income), net

(4,254)

(5,032)

(17,089)

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

US, Germany and Certain Other European Regions Consumable Businesses

1,782

1,023

10,150

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

France, UK, Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses

176,128

158,389

162,717

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

17,187

19,737

14,474

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

195,817

185,772

200,101

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

83,428

92,554

123,442

Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]

Reconciliation of Fixed Assets from Segment to Consolidated [Line Items]

^[1]

$ (81,303)

$ (68,319)

$ (87,918)

[1]	(e) Includes results of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments.

Capital Expenditures (Detail) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

US, Germany and Certain Other European Regions Consumable Businesses

$ 44,236

$ 56,481

$ 76,440

Reconciliation of Fixed Assets from Segment to Consolidated [Line Items]

France, UK, Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses

9,267

8,333

19,836

Reconciliation of Fixed Assets from Segment to Consolidated [Line Items]

2,978

2,506

3,839

Reconciliation of Fixed Assets from Segment to Consolidated [Line Items]

17,078

14,434

19,593

Reconciliation of Fixed Assets from Segment to Consolidated [Line Items]

11,397

25,546

24,510

Reconciliation of Fixed Assets from Segment to Consolidated [Line Items]

Segment Reporting, Asset Reconciling Item [Line Items]

^[1]

$ 3,516

$ 5,662

$ 8,662

[1]	Includes capital expenditures of Corporate headquarters.

Assets (Detail) - USD ($)
$ in Thousands

Dec. 31, 2010

Dec. 31, 2009

US, Germany and Certain Other European Regions Consumable Businesses

$ 3,257,951

$ 3,087,932

Segment Reporting, Asset Reconciling Item [Line Items]

France, UK, Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses

578,770

602,272

Segment Reporting, Asset Reconciling Item [Line Items]

390,572

388,831

Segment Reporting, Asset Reconciling Item [Line Items]

932,126

809,924

Segment Reporting, Asset Reconciling Item [Line Items]

995,090

973,764

Segment Reporting, Asset Reconciling Item [Line Items]