8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 28, 2010

ZIMMER HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-16407	13-4151777
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

345 East Main Street
Warsaw, Indiana 46580
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (574) 267-6131

Not applicable
(Former name or former address, if changed since last report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

          On January 28, 2010, Zimmer Holdings, Inc. (the “Registrant”) reported its results of operations for the quarter and year ended December 31, 2009. The Registrant’s earnings release is attached as Exhibit 99.1 and the information set forth therein is incorporated herein by reference and constitutes a part of this report.

          The earnings release attached as Exhibit 99.1 includes two types of non-GAAP financial measures that differ from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures may not be comparable to similar measures reported by other companies and should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP. The first type of non-GAAP financial measure included in the press release consists of sales information reported on a constant currency basis which has been calculated by translating actual current and prior-period sales at the same predetermined exchange rate. The translated results are then used to determine year-over-year percentage increases or decreases that exclude the effect of changes in foreign currency exchange rates.

          The second type of non-GAAP financial measure included in the press release consists of operating performance measures that have been adjusted to exclude certain items. The earnings release presents adjusted net earnings and adjusted diluted EPS for the fourth quarter and full year 2009 and projected adjusted diluted EPS for the full year 2010 to exclude the effects of inventory step-up and acquisition, integration, realignment and other related expenses, net of tax. In addition, adjusted net earnings and adjusted diluted EPS for the fourth quarter and full year 2009 exclude the effects of a goodwill impairment charge related to the Registrant’s U.S. Spine business. Adjusted net earnings and adjusted diluted EPS for the full year 2009 also exclude the effects of a net curtailment and settlement gain and a provision for known and anticipated claims relating to the previously announced voluntary suspension of marketing and distribution of the Durom^® Acetabular Component (“Durom^® Cup”) in the U.S., net of tax.

          Adjusted net earnings and adjusted diluted EPS for the 2008 periods presented in the press release exclude the effects of inventory step-up, a provision for known and anticipated claims relating to the Durom^® Cup and acquisition, integration and other related expenses, net of tax. Adjusted net earnings and adjusted diluted EPS for the full year 2008 also exclude the effects of a tax benefit recorded in the third quarter of 2008 related to a civil settlement amount paid in 2007 to the U.S. government.

          Management uses this non-GAAP information internally to evaluate the performance of the business and believes that it provides useful information to investors by offering the ability to make more meaningful period-to-period comparisons of the Registrant’s on-going operating results, the ability to better identify operating trends that may otherwise be masked or distorted by these types of items and to perform related trend analysis, and a higher degree of transparency of certain items.

          All of the non-GAAP financial measures are reconciled to the most directly comparable GAAP financial measure in the press release.

          The Registrant is furnishing the information contained in this report, including the Exhibit, pursuant to Item 2.02 of Form 8-K promulgated by the Securities and Exchange Commission (the “SEC”). This information shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC. By filing this report on Form 8-K and furnishing this information, the Registrant makes no admission as to the materiality of any information in this report, including the Exhibit.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS

          (d) Exhibits

Exhibit No.	Description
99.1	Press Release, dated January 28, 2010, issued by the Registrant

SIGNATURES

                Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: January 28, 2010

ZIMMER HOLDINGS, INC.
By:	/s/ Chad F. Phipps
Name:	Chad F. Phipps
Title:	Senior Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated January 28, 2010, issued by the Registrant

EX-99.1

Exhibit 99.1

Contacts:
Media	Investors
Brad Bishop	Paul Blair	James T. Crines
574-372-4291	574-371-8042	574-372-4264
bradley.bishop@zimmer.com	paul.blair@zimmer.com	james.crines@zimmer.com

Zimmer Reports Fourth Quarter and 2009 Financial Results

• Net Sales of $1.11 billion for the fourth quarter increased by 7.5% reported over the prior year period (an increase of 2.5% constant currency)

• Diluted EPS for the fourth quarter were $0.74 reported, a decrease of 1.3% from the prior year period, and $1.12 adjusted, an increase of 12.0% over the prior year period

• Net Sales of $4.10 billion for the full year represent a decrease of 0.6% reported from the prior year (an increase of 0.9% constant currency)

• Diluted EPS for the full year were $3.32 reported, a decrease of 10.8% from the prior year, and $3.94 adjusted, a decrease of 2.7% from the prior year

(WARSAW, IN) January 28, 2010—Zimmer Holdings, Inc. (NYSE and SIX: ZMH) today reported financial results for the fourth quarter and year ended December 31, 2009. The Company reported fourth quarter net sales of $1.11 billion, an increase of 7.5% reported and 2.5% constant currency over the fourth quarter of 2008. Diluted earnings per share for the quarter were $0.74 reported and $1.12 adjusted, an increase of 12.0% adjusted over the prior year period. Full-year net sales were $4.10 billion, a decrease of 0.6% reported and an increase of 0.9% constant currency. Diluted earnings per share for the year were $3.32 reported and $3.94 adjusted, a decrease of 2.7% adjusted from the prior year.

“A solid performance in the fourth quarter enabled us to accomplish our major objectives for the year,” said David Dvorak, Zimmer President and CEO. “We once again recorded year-over-year sales growth for the quarter in all three of our geographic reporting segments, driven by a 5.5% constant currency increase in our industry-leading knee

replacement business. The continued improvement in our Reconstructive sales performance, combined with recent new product clearances, forms a foundation for sustained sales growth and leveraged earnings in 2010.”

Net earnings for the fourth quarter were $155.2 million on a reported basis and $236.1 million on an adjusted basis, an increase of 5.1% adjusted over the prior year period. Operating cash flow for the fourth quarter was $385.5 million. Net earnings for the full year 2009 were $717.4 million on a reported basis and $849.9 million on an adjusted basis, a decrease of 8.1% adjusted from the prior year. Operating cash flow for the full year was $1,117.5 million.

In the fourth quarter, the Company utilized the proceeds from a $1.0 billion offering of senior unsecured notes to pay off its U.S. dollar senior credit facility debt of $471.0 million and acquired 9.0 million shares of its common stock for an aggregate purchase price of $519.1 million. For the full year 2009, the Company purchased 19.8 million shares for a total of $923.2 million. At the end of the year, $211.1 million of authorization remained under the Company’s $1.25 billion repurchase program, which expires on December 31, 2010.

During the quarter, the Company recorded a goodwill impairment charge of $73.0 million net of tax or $0.35 per diluted share related to its U.S. Spine reporting unit. A combination of factors has contributed to a decrease in the implied fair value of the U.S. Spine reporting unit compared with prior year.

Guidance

The Company expects full-year revenues for 2010 to increase between 3% and 5% on a constant currency basis. Assuming foreign currency exchange rates remain near year-end 2009 levels, the Company estimates that foreign currency translation will increase revenues by approximately 1% for the full year 2010, resulting in reported revenue growth between 4% and 6%. Full-year 2010 adjusted diluted earnings per share are projected to be in a range of $4.15 to $4.35.

Conference Call

The Company will conduct its fourth quarter 2010 investor conference call today, January 28, 2010, at 8:00 a.m. Eastern Time. The live audio webcast can be accessed via Zimmer’s Investor Relations website at http://investor.zimmer.com. It will be archived for replay following the conference.

Individuals who wish to dial into the conference call may do so at (866) 530-8387. International callers should dial (706) 634-6422. A digital recording will be available two hours after the completion of the conference call from January 28, 2010 to February 11, 2010. To access the recording, U.S./Canada callers should dial (800) 642-1687, and International callers should dial (706) 645-9291, and enter the Conference ID, 49597507. A copy of this press release and other financial and statistical information about the periods to be presented in the conference call will be accessible through the Zimmer website at http://investor.zimmer.com.

Sales Tables

The following tables provide sales results by geographic segment and product category, as well as the percentage change compared to the prior year quarter and full year on both a reported and constant currency basis. Beginning in 2009, the Company’s Dental product category sales are no longer included within its Reconstructive products category. Prior year amounts related to Dental product category sales have been reclassified to conform to the 2009 presentation.

NET SALES — THREE MONTHS ENDED DECEMBER 31, 2009
(in millions, unaudited)

						Constant
	Net		Reported			Currency
	Sales		% Growth			% Growth
Geographic Segments
Americas	$	604		2	%		2	%
Europe		331		12			1
Asia Pacific		172		19			7
Total		1,107		7			2
Product Categories
Reconstructive
Americas		454		6			5
Europe		263		10			—
Asia Pacific		128		20			6
Total		845		9			4
Knees
Americas		283		7			6
Europe		127		12			2
Asia Pacific		66		26			10
Total		476		10			6
Hips
Americas		143		2			1
Europe		130		7			(3	)
Asia Pacific		60		14			2
Total		333		6			—
Extremities		36		19			15
Dental		57		—			(4	)
Trauma		63		11			7
Spine		63		(12	)		(15	)
OSP and other		79		15			11

NET SALES — TWELVE MONTHS ENDED DECEMBER 31, 2009
(in millions, unaudited)

						Constant
	Net		Reported			Currency
	Sales		% Growth			% Growth
Geographic Segments
Americas	$	2,372		1	%		1	%
Europe		1,119		(5	)		1
Asia Pacific		604		3			—
Total		4,095		(1	)		1
Product Categories
Reconstructive
Americas		1,771		1			1
Europe		902		(7	)		(1	)
Asia Pacific		452		3			1
Total		3,125		(1	)		—
Knees
Americas		1,102		1			1
Europe		429		(5	)		1
Asia Pacific		230		4			4
Total		1,761		—			2
Hips
Americas		566		(2	)		(1	)
Europe		448		(9	)		(3	)
Asia Pacific		214		2			(2	)
Total		1,228		(4	)		(2	)
Extremities		136		12			14
Dental		205		(10	)		(8	)
Trauma		235		6			6
Spine		253		10			12
OSP and other		277		—			—

About the Company

Founded in 1927 and headquartered in Warsaw, Indiana, Zimmer designs, develops, manufactures and markets orthopaedic reconstructive, spinal and trauma devices, dental implants, and related surgical products. Zimmer has operations in more than 25 countries around the world and sells products in more than 100 countries. Zimmer’s 2009 sales were approximately $4.1 billion. The Company is supported by the efforts of more than 8,000 employees worldwide.

###

For more information about Zimmer, visit www.zimmer.com

Note on Non-GAAP Financial Measures

As used in this press release, the term “adjusted” refers to operating performance measures that exclude inventory step-up, the provision for certain Durom^® Acetabular Component product claims in the U.S., goodwill impairment, acquisition, integration, realignment and other expenses, net curtailment and settlement, and the tax benefit related to the 2007 civil settlement with the U.S. government. The provision related to the Durom Acetabular Component is classified as a special item that is different from the Company’s routine product liability claims for a number of reasons, including that the provision is limited to revisions associated with surgeries that predate the Company’s voluntary suspension and which also occur within two years of the original surgery date. The term “constant currency” refers to any financial measure that excludes the effect of changes in foreign currency exchange rates. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measure are included in this press release.

Zimmer Safe Harbor Statement

This press release contains forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 based on current expectations, estimates, forecasts and projections about the orthopaedics industry, management’s beliefs and assumptions made by management. Forward-looking statements may be identified by the use of forward-looking terms such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” and “seeks” or the negative of such terms or other variations on such terms or comparable terminology. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that could cause actual

outcomes and results to differ materially. These risks and uncertainties include, but are not limited to, our compliance with the Corporate Integrity Agreement through 2012; the success of our quality initiatives; the outcome of the investigation by the U.S. government into Foreign Corrupt Practices Act matters announced in October 2007; price and product competition; changes in customer demand for our products and services caused by demographic changes or other factors; dependence on new product development, technological advances and innovation; shifts in the product category or regional sales mix of our products and services; supply and prices of raw materials and products; control of costs and expenses; our ability to obtain and maintain adequate intellectual property protection; our ability to successfully integrate acquired businesses; our ability to form and implement alliances; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the U.S. Food and Drug Administration and foreign government regulators and tax obligations and risks; the impact of temporarily suspending U.S. distribution of one of our key hip replacement products; product liability and intellectual property litigation losses; health care reform measures in the U.S., reductions in reimbursement levels from third-party payors and cost-containment efforts of health care purchasing organizations; our ability to retain the independent agents and distributors who market our products; changes in general industry and market conditions, including domestic and international growth rates and general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; and the costs of defending or resolving the putative class action securities litigation and related lawsuits resulting from our September 2007 settlement with the U.S. government and other matters. For a further list and description of such risks and uncertainties, see our periodic reports filed with the U.S. Securities and Exchange Commission. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be set forth in our periodic reports. Readers of this document are cautioned not to place undue reliance on these forward-looking statements, since, while we believe the assumptions on which the forward-looking statements are based are reasonable, there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary statement is applicable to all forward-looking statements contained in this document.

ZIMMER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2009 and 2008
(in millions, except per share amounts, unaudited)

	2009			2008			% Inc/(Dec)
Net Sales	$	1,107.3		$	1,030.2			7	%
Cost of products sold		274.4			243.1			13
Gross Profit		832.9			787.1			6
Research and development		51.6			48.3			7
Selling, general and administrative		460.2			434.5			6
Certain claims		—			21.5			(100	)
Goodwill impairment		73.0			—			100
Acquisition, integration, realignment and other		9.6			43.1			(78	)
Operating expenses		594.4			547.4			9
Operating Profit		238.5			239.7			(1	)
Interest and other, net		(8.7	)		(4.2	)		107
Earnings before income taxes		229.8			235.5			(2	)
Provision for income taxes		74.6			67.9			10
Net Earnings		155.2			167.6			(7	)
Less: Net earnings attributable to noncontrolling interest		—			(0.1	)		(100	)
Net Earnings of Zimmer Holdings, Inc.	$	155.2		$	167.5			(7	)
Earnings Per Common Share
Basic	$	0.74		$	0.75			(1	)
Diluted	$	0.74		$	0.75			(1	)
Weighted Average Common Shares Outstanding
Basic		210.0			223.7
Diluted		211.2			224.2

Certain amounts in the 2008 consolidated statement of earnings have been reclassified to conform to the 2009 presentation.

ZIMMER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2009 and 2008
(in millions, except per share amounts, unaudited)

	2009			2008			% Inc/(Dec)
Net Sales	$	4,095.4		$	4,121.1			(1	)%
Cost of products sold		990.8			997.3			(1	)
Gross Profit		3,104.6			3,123.8			(1	)
Research and development		205.4			192.3			7
Selling, general and administrative		1,729.2			1,704.0			1
Certain claims		35.0			69.0			(49	)
Goodwill impairment		73.0			—			100
Acquisition, integration, realignment and other		75.3			68.5			10
Net curtailment and settlement		(32.1	)		—			100
Operating expenses		2,085.8			2,033.8			3
Operating Profit		1,018.8			1,090.0			(7	)
Interest and other, net		(20.6	)		31.8			(165	)
Earnings before income taxes		998.2			1,121.8			(11	)
Provision for income taxes		280.8			272.3			3
Net Earnings		717.4			849.5			(16	)
Less: Net earnings attributable to noncontrolling interest		—			(0.9	)		(100	)
Net Earnings of Zimmer Holdings, Inc.	$	717.4		$	848.6			(15	)
Earnings Per Common Share
Basic	$	3.34		$	3.73			(10	)
Diluted	$	3.32		$	3.72			(11	)
Weighted Average Common Shares Outstanding
Basic		215.0			227.3
Diluted		215.8			228.3

Certain amounts in the 2008 consolidated statement of earnings have been reclassified to conform to the 2009 presentation.

ZIMMER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, unaudited)

	December 31,		December 31,
	2009		2008
Assets
Current Assets:
Cash and cash equivalents	$	691.7	$	212.6
Restricted cash		0.1		2.7
Certificates of deposit		66.4		—
Receivables, net		751.4		732.8
Inventories, net		913.2		928.3
Other current assets		315.2		302.2
Total current assets		2,738.0		2,178.6
Property, plant and equipment, net		1,221.7		1,264.1
Goodwill		2,783.5		2,774.8
Intangible assets, net		858.0		872.1
Other assets		184.3		149.4
Total Assets	$	7,785.5	$	7,239.0
Liabilities and Shareholders’ Equity
Current liabilities	$	690.7	$	771.1
Other long-term liabilities		328.5		353.9
Long-term debt		1,127.6		460.1
Shareholders’ equity		5,638.7		5,653.9
Total Liabilities and Shareholders’ Equity	$	7,785.5	$	7,239.0

ZIMMER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2009 and 2008
(in millions, unaudited)

	2009			2008
Cash flows provided by (used in) operating activities
Net earnings of Zimmer Holdings, Inc.	$	717.4		$	848.6
Depreciation and amortization		337.4			275.1
Goodwill impairment		73.0			—
Gain on sale of investments		—			(38.8	)
In-process research and development		—			38.5
Net curtailment and settlement		(32.1	)		—
Share-based compensation		75.3			69.9
Inventory step-up		12.5			7.0
Income tax benefits from employee stock compensation plans		3.5			12.5
Excess income tax benefits from employee stock compensation plans		(0.4	)		(6.5	)
Changes in operating assets and liabilities
Income taxes		(12.7	)		(75.3	)
Receivables		(4.6	)		(44.4	)
Inventories		36.2			(148.1	)
Accounts payable and accrued expenses		(132.6	)		119.3
Other assets and liabilities		44.6			(19.7	)
Net cash provided by operating activities		1,117.5			1,038.1
Cash flows provided by (used in) investing activities
Additions to instruments		(123.7	)		(237.9	)
Additions to other property, plant and equipment		(105.1	)		(250.0	)
Acquisition of intellectual property rights		(35.8	)		(109.4	)
Purchases of certificates of deposit		(66.4	)		—
Proceeds from sale of other assets		—			54.9
Abbott Spine acquisition, net of acquired cash		—			(363.0	)
Investments in other assets		(50.2	)		(18.8	)
Net cash used in investing activities		(381.2	)		(924.2	)
Cash flows provided by (used in) financing activities
Net proceeds (payments) under revolving credit facility		(330.0	)		330.0
Proceeds from employee stock compensation plans		9.5			57.0
Excess income tax benefits from employee stock compensation plans		0.4			6.5
Repurchase of common stock		(923.7	)		(737.0	)
Proceeds from issuance of notes		998.8			—
Debt issuance costs		(8.5	)		—
Acquisition of noncontrolling interest		(8.6	)		—
Net cash used in financing activities		(262.1	)		(343.5	)
Effect of exchange rates on cash and cash equivalents		4.9			(21.7	)
Increase (decrease) in cash and cash equivalents		479.1			(251.3	)
Cash and cash equivalents, beginning of period		212.6			463.9
Cash and cash equivalents, end of period	$	691.7		$	212.6

ZIMMER HOLDINGS, INC.
NET SALES BY GEOGRAPHIC SEGMENT
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2009 and 2008
(in millions, unaudited)

	Three Months Ended December 31,							Twelve Months Ended December 31,
	2009		2008		% Inc			2009		2008		% Inc/(Dec)
Americas	$	603.7	$	589.0		2	%	$	2,372.4	$	2,353.9		1	%
Europe		331.3		296.8		12			1,119.2		1,179.1		(5	)
Asia Pacific		172.3		144.4		19			603.8		588.1		3
Total	$	1,107.3	$	1,030.2		7		$	4,095.4	$	4,121.1		(1	)

ZIMMER HOLDINGS, INC.
NET SALES BY PRODUCT CATEGORY
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2009 and 2008
(in millions, unaudited)

	Three Months Ended December 31,							Twelve Months Ended December 31,
	2009		2008		% Inc/(Dec)			2009		2008		% Inc/(Dec)
Reconstructive	$	844.9	$	775.9		9	%	$	3,124.7	$	3,163.5		(1	)%
Dental		56.6		56.6		—			204.7		227.5		(10	)
Trauma		63.6		57.1		11			234.8		222.3		6
Spine		63.1		71.7		(12	)		253.6		229.7		10
OSP and other		79.1		68.9		15			277.6		278.1		—
Total	$	1,107.3	$	1,030.2		7		$	4,095.4	$	4,121.1		(1	)

ZIMMER HOLDINGS, INC.
RECONCILIATION OF REPORTED % GROWTH TO
CONSTANT CURRENCY % GROWTH
(unaudited)

	For the Three Months Ended
	December 31, 2009
				Foreign			Constant
	Reported			Exchange			Currency
	% Growth			Impact			% Growth
Geographic Segments
Americas		2	%		—	%		2	%
Europe		12			11			1
Asia Pacific		19			12			7
Total		7			5			2
Product Categories
Reconstructive
Americas		6			1			5
Europe		10			10			—
Asia Pacific		20			14			6
Total		9			5			4
Knees
Americas		7			1			6
Europe		12			10			2
Asia Pacific		26			16			10
Total		10			4			6
Hips
Americas		2			1			1
Europe		7			10			(3	)
Asia Pacific		14			12			2
Total		6			6			—
Extremities		19			4			15
Dental		—			4			(4	)
Trauma		11			4			7
Spine		(12	)		3			(15	)
OSP and other		15			4			11

ZIMMER HOLDINGS, INC.
RECONCILIATION OF REPORTED % GROWTH TO
CONSTANT CURRENCY % GROWTH
(unaudited)

	For the Twelve Months Ended
	December 31, 2009
				Foreign			Constant
	Reported			Exchange			Currency
	% Growth			Impact			% Growth
Geographic Segments
Americas		1	%		—	%		1	%
Europe		(5	)		(6	)		1
Asia Pacific		3			3			—
Total		(1	)		(2	)		1
Product Categories
Reconstructive
Americas		1			—			1
Europe		(7	)		(6	)		(1	)
Asia Pacific		3			2			1
Total		(1	)		(1	)		—
Knees
Americas		1			—			1
Europe		(5	)		(6	)		1
Asia Pacific		4			—			4
Total		—			(2	)		2
Hips
Americas		(2	)		(1	)		(1	)
Europe		(9	)		(6	)		(3	)
Asia Pacific		2			4			(2	)
Total		(4	)		(2	)		(2	)
Extremities		12			(2	)		14
Dental		(10	)		(2	)		(8	)
Trauma		6			—			6
Spine		10			(2	)		12
OSP and other		—			—			—

ZIMMER HOLDINGS, INC.
Reconciliation of Net Earnings and Adjusted Net Earnings
For the Three Months Ended December 31, 2009 and 2008
(in millions, unaudited)

	Three Months
	Ended December 31,
	2009			2008
Net Earnings	$	155.2		$	167.5
Inventory step-up		2.6			3.8
Certain claims		—			21.5
Goodwill impairment		73.0			—
Acquisition, integration, realignment and other		9.6			43.1
Taxes on inventory step-up, certain claims and acquisition, integration, realignment and other*		(4.3	)		(11.3	)
Adjusted Net Earnings	$	236.1		$	224.6

ZIMMER HOLDINGS, INC.
Reconciliation of Net Earnings and Adjusted Net Earnings
For the Twelve Months Ended December 31, 2009 and 2008
(in millions, unaudited)

	Twelve Months
	Ended December 31,
	2009			2008
Net Earnings	$	717.4		$	848.6
Inventory step-up		12.5			7.0
Certain claims		35.0			69.0
Goodwill impairment		73.0			—
Acquisition, integration, realignment and other		75.3			68.5
Net curtailment and settlement		(32.1	)		—
Taxes on inventory step-up, certain claims, acquisition, integration, realignment and other and net curtailment and settlement*		(31.2	)		(38.0	)
Tax benefit from civil settlement		—			(30.8	)
Adjusted Net Earnings	$	849.9		$	924.3

* The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred.

ZIMMER HOLDINGS, INC.
Reconciliation of Diluted EPS and Adjusted Diluted EPS
For the Three Months Ended December 31, 2009 and 2008
(unaudited)

	Three Months
	Ended December 31,
	2009			2008
Diluted EPS	$	0.74		$	0.75
Inventory step-up		0.01			0.01
Certain claims		—			0.10
Goodwill impairment		0.35			—
Acquisition, integration, realignment and other		0.04			0.19
Taxes on inventory step-up, certain claims and acquisition, integration, realignment and other*		(0.02	)		(0.05	)
Adjusted Diluted EPS	$	1.12		$	1.00

ZIMMER HOLDINGS, INC.
Reconciliation of Diluted EPS and Adjusted Diluted EPS
For the Twelve Months Ended December 31, 2009 and 2008
(unaudited)

	Twelve Months
	Ended December 31,
	2009			2008
Diluted EPS	$	3.32		$	3.72
Inventory step-up		0.06			0.03
Certain claims		0.16			0.30
Goodwill impairment		0.34			—
Acquisition, integration, realignment and other		0.35			0.30
Net curtailment and settlement		(0.15	)		—
Taxes on inventory step-up, certain claims, acquisition, integration, realignment and other and net curtailment and settlement*		(0.14	)		(0.17	)
Tax benefit from civil settlement		—			(0.13	)
Adjusted Diluted EPS	$	3.94		$	4.05

* The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred.

ZIMMER HOLDINGS, INC.
Reconciliation of Operating Profit to Adjusted Operating Profit
For the Three Months Ended December 31, 2009 and 2008
(unaudited)

	Three Months
	Ended December 31,
	2009		2008
Operating Profit	$	238.5	$	239.7
Inventory step-up		2.6		3.8
Certain claims		—		21.5
Goodwill impairment		73.0		—
Acquisition, integration, realignment and other		9.6		43.1
Adjusted Operating Profit	$	323.7	$	308.1

ZIMMER HOLDINGS, INC.
Reconciliation of Operating Profit to Adjusted Operating Profit
For the Twelve Months Ended December 31, 2009 and 2008
(unaudited)

	Twelve Months
	Ended December 31,
	2009			2008
Operating Profit	$	1,018.8		$	1,090.0
Inventory step-up		12.5			7.0
Certain claims		35.0			69.0
Goodwill impairment		73.0			—
Acquisition, integration, realignment and other		75.3			68.5
Net curtailment and settlement		(32.1	)		—
Adjusted Operating Profit	$	1,182.5		$	1,234.5

ZIMMER HOLDINGS, INC.
Reconciliation of 2010 Projected Diluted EPS
and Projected Adjusted Diluted EPS
(unaudited)

Projected Twelve Months Ended December 31, 2010:

	Low			High
Diluted EPS	$	4.08		$	4.28
Inventory step-up		0.01			0.01
Acquisition, integration, realignment and other		0.09			0.09
Taxes on inventory step-up, acquisition, integration realignment and other *		(0.03	)		(0.03	)
Adjusted Diluted EPS	$	4.15		$	4.35

* The tax effect is calculated based upon the statutory rates for the jurisdictions where the items were incurred.