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): October 25, 2006

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))

TABLE OF CONTENTS

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     On October 25, 2006, Zimmer Holdings, Inc. (the “Registrant”) reported its results of operations for the quarter ended September 30, 2006. 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.

     As previously announced, the Registrant acquired Centerpulse AG on October 2, 2003 and Implex Corp. on April 23, 2004. The earnings release attached as Exhibit 99.1 includes the operating performance measures of adjusted net earnings, adjusted diluted EPS and projected adjusted diluted EPS which exclude acquisition and integration expenses and inventory step-up. It also includes other non-GAAP financial measures including adjusted net margin, adjusted operating margin and adjusted gross margin.

     In addition, the Registrant’s financial results include share-based payment from the adoption of Statement of Financial Accounting Standard (“SFAS”) No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”). The Registrant has disclosed certain of the adjusted non-GAAP financial measures referred to above excluding the effect of share-based payment under SFAS 123(R) to allow for a better comparison of results in the current period to those in prior periods that did not include SFAS 123(R) share-based payment. The Registrant has historically reported these adjusted non-GAAP financial measures and believes that presenting the adjusted non-GAAP financial measures for the three and nine month periods ended September 30, 2006 excluding the effect of share-based payment enhances the comparability of results against prior periods.

     The Registrant also reported sales performance using the non-GAAP financial measure of constant currency sales. Constant currency results are calculated by translating actual current and prior-year sales at the same predetermined exchange rates. 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. Constant currency sales as defined and presented by the Registrant may not be comparable to similar measures reported by other companies.

     Management believes that the presentation of these non-GAAP financial measures allows investors to more easily compare the Registrant’s performance on a period to period basis. It also aids investors in understanding the operating results of the Registrant absent the specific acquisition-related items detailed above and provides further comparative information due to the effect of adopting SFAS 123(R). However, these measures should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP.

     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 Exhibits, 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

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and furnishing this information, the Registrant makes no admission as to the materiality of any information in this report, including the Exhibits.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits

Exhibit No.	Description
99.1	Press Release, dated October 25, 2006, issued by the Registrant

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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: October 25, 2006

ZIMMER HOLDINGS, INC.
By: Name:	/s/ CHAD F. PHIPPS Chad F. Phipps
Title:	Associate General Counsel and Secretary

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated October 25, 2006, issued by the Registrant

EX-99.1

Exhibit 99.1

Contacts:
Media	Investors
Brad Bishop	Sean O’Hara	Sam Leno
574-372-4291	574-371-8032	574-372-4790
bradley.bishop@zimmer.com	sean.f.ohara@zimmer.com	sam.leno@zimmer.com

Zimmer Reports Third Quarter 2006 Financial Results

Highlights

• Net Sales of $820 million represent an increase of 8% reported (7% constant currency)

• Americas Reconstructive sales increased 8% reported (7% constant currency)

• Dental sales increased 20% reported (19% constant currency)

• Worldwide and Americas recorded positive price increases of 0.3% and 1.8%, respectively

• Continued margin strength—78% gross, 31% operating and 22% net reported; 78% gross, 32% operating and 23% net adjusted; and 78% gross, 34% operating and 24% net adjusted excluding the effect of share-based payment

• Diluted EPS were $0.76 reported, $0.77 adjusted, and $0.82 adjusted excluding the effect of share-based payment, an increase of 17%

• Operating cash flow of $286 million, a 23% increase over prior year

• Repurchased 4.8 million common shares

(WARSAW, IN) October 25, 2006 — Zimmer Holdings, Inc. (NYSE and SWX: ZMH) today reported financial results for the quarter ended September 30, 2006. For the quarter, the Company announced net sales of $820 million, an increase of 8% reported and 7% constant currency over the prior year period. Diluted earnings per share for the quarter were $0.76 reported and $0.77 adjusted, exceeding First Call earnings estimates of $0.75 adjusted.

Reported and adjusted diluted earnings per share for the third quarter of 2006 include a $0.05 per diluted share impact related to SFAS 123(R), Share-Based Payment. Effective January 1, 2006, the Company adopted this new accounting standard using the modified-prospective method. In accordance with this adoption method, the Company is not adjusting its historical financial statements to reflect the impact of share-based payment. Excluding the impact of SFAS 123(R), adjusted diluted earnings per share for the third quarter were $0.82, representing a 17% increase over adjusted diluted earnings per share for the third quarter of 2005. Excluding the impact of SFAS 123(R), adjusted diluted earnings per share for the first nine months of 2006 were $2.58, representing a 15% increase over adjusted diluted earnings per share for the first nine months of 2005.

“We were pleased to exceed our earnings guidance even though sales were not as strong as previously forecasted,” said Ray Elliott, Zimmer Chairman, President and CEO. “We have been about a quarter behind all year relative to anticipated sales growth rates, however, the third quarter was stronger than the second and we expect the fourth to be stronger than the third. The trends continue to be positive—during the month of September, on a day-rate basis, the combined Americas hip and knee growth was more than 12 percent, and during the third quarter, our entire Asia Pacific business grew double digit constant currency.”

The Company said the Zimmer^® Gender Solutions™ Knee is being very well received by surgeons and patients. The Company introduced its Gender Solutions knee implant in May as part of an overall strategy to address gender-specific orthopaedic issues. Initial implant and provisional sets were provided only to surgeon developers. Product availability continues to expand and the Company expects to have over 1,200 sets deployed to the market by year-end 2006. Women currently account for more than 60 percent of all knee replacements yet, until the release of the Gender Solutions knee, no product has ever specifically addressed all of the clinically relevant anatomical differences between men and women. Zimmer launched its first-ever major direct-to-patient marketing program earlier this month featuring “The Blue Ladies” by artist R. O. Blechman (of The New Yorker magazine fame). Targeted television and print advertising has been added to a public relations program that had already generated more than 100 million media impressions since June.

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During the quarter, the Company also expanded the release of two important hip products in the alternate bearing category: the Durom^® Acetabular Cup with Metasul^® LDH™ Large Diameter Heads; and the Trilogy AB^® Ceramic-on-Ceramic Acetabular System. “With our array of new products, which also includes the exclusive Trabecular Metal™ Primary Hip Prosthesis and the EPOCH^® II Composite Hip Stem, we are well positioned for 2007 to address a wide spectrum of surgeon preferences and patient requirements,” said Elliott.

The Company says it has substantially completed the integration of Centerpulse AG, which it acquired on October 3, 2003, completing over 3,000 milestones, with only a few manufacturing, distribution and information technology projects to be carried into 2007. The Company said it has already realized annual synergies of more than $100 million, exceeding the originally projected $70 to $90 million, and additional synergies should be realized in 2007. “We are pleased with the spirit and dedication shown by all of our employees during this process and we are now moving ahead as one fully integrated global company,” said Elliott.

In the third quarter, Zimmer purchased 4.8 million common shares for a total of $314 million as part of its $1 billion repurchase program announced in 2006. There is $365 million still available through the end of 2007.

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 nine months on both a reported and constant currency basis.

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NET SALES — THREE MONTHS ENDED SEPTEMBER 30, 2006
(in millions, unaudited)

						Constant
	Net		Reported			Currency
	Sales		% Growth			% Growth
Geographic Segments
Americas	$	502		6	%		6	%
Europe		197		11			7
Asia Pacific		121		8			11
Total		820		8			7
Product Categories
Reconstructive
Americas		405		8			7
Europe		175		10			6
Asia Pacific		96		7			10
Total		676		8			7
Knees
Americas		225		6			6
Europe		72		13			9
Asia Pacific		41		10			12
Total		338		8			7
Hips
Americas		141		8			8
Europe		90		6			2
Asia Pacific		47		3			6
Total		278		7			6
Extremities		18		17			16
Dental		42		20			19
Trauma		49		9			9
Spine		42		10			10
Orthopaedic Surgical Products and other		53		(4	)		(4	)

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NET SALES — NINE MONTHS ENDED SEPTEMBER 30, 2006
(in millions, unaudited)

						Constant
	Net		Reported			Currency
	Sales		% Growth			% Growth
Geographic Segments
Americas	$	1,539		6	%		6	%
Europe		664		4			6
Asia Pacific		359		3			8
Total		2,562		5			6
Product Categories
Reconstructive
Americas		1,246		7			7
Europe		595		3			5
Asia Pacific		286		2			7
Total		2,127		5			7
Knees
Americas		700		6			6
Europe		251		6			9
Asia Pacific		122		3			8
Total		1,073		6			7
Hips
Americas		430		7			7
Europe		299		(1	)		1
Asia Pacific		141		(1	)		4
Total		870		3			5
Extremities		55		14			15
Dental		129		19			19
Trauma		144		8			9
Spine		132		12			12
Orthopaedic Surgical Products and other		159		(5	)		(5	)

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Net earnings for the third quarter were $183 million on a reported basis, and were $187 million adjusted. Included in adjusted earnings for the third quarter of 2006 is $12 million of after tax expense due to the January 1, 2006 adoption of SFAS 123(R), Share-Based Payment. Third quarter adjusted net earnings, excluding the effect of share-based payment, were $199 million, a 14% increase over the third quarter of 2005.

Net earnings for the first nine months of 2006 were $590 million on a reported basis, and were $598 million adjusted, an increase of 7% adjusted over the prior year period. Included in adjusted earnings for the first nine months of 2006 is $39 million of after tax expense due to the January 1, 2006 adoption of SFAS 123(R), Share-Based Payment. First nine months 2006 adjusted net earnings, excluding the effect of share-based payment, were $637 million, a 14% increase over the first nine months of 2005.

Guidance

The Company is revising its previous sales guidance for the fourth quarter of 2006 to a range of $922 million to $932 million, which represents a 9% to 10% increase over the prior year. It is also reaffirming its previous adjusted diluted earnings per share guidance of $0.99 for the same period.

Conference Call

The Company will conduct its third quarter 2006 investor conference call on Thursday, October 26, 2006, 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 (800) 406-1106. International callers should dial (706) 634-7075. A digital recording will be available two hours after the completion of the conference call from October 26, 2006 to November 9, 2006. To access the recording, US/Canada callers should dial (800) 642-1687, or for International callers, dial (706) 645-9291, and enter the Conference ID, 8092596. A copy of this press release and other

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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.

As previously announced, the Company will conduct a meeting for investment analysts on Wednesday, February 14, 2007, during the American Academy of Orthopaedic Surgeons meeting in San Diego. The meeting will be held at 5:00 p.m. (Pacific Time); the location will be announced when it is finalized.

The investment analyst meeting will be hosted by Ray Elliott, Chairman, President and CEO, and Sam Leno, Executive Vice President, Finance and Corporate Services and Chief Financial Officer, and will feature a presentation and question-and-answer period.

To avoid any delay in starting the meeting on time, investment analysts are encouraged to pre-register for the meeting by contacting Michele Picillo in advance of the meeting at 574-372-4474 or by e-mail at michele.picillo@zimmer.com

About the Company

Founded in 1927 and headquartered in Warsaw, Indiana, Zimmer is the worldwide #1 pure-play orthopaedic leader in designing, developing, manufacturing and marketing reconstructive and spinal implants, trauma and related orthopaedic surgical products. Zimmer has operations in more than 24 countries around the world and sells products in more than 100 countries. Zimmer’s 2005 sales were approximately $3.3 billion. The Company is supported by the efforts of more than 6,700 employees worldwide.

###

For more information about Zimmer and the Gender Solutions™ Knee Implant,
visit www.zimmer.com

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Note on Non-GAAP Financial Measures

As used in this press release, the term “adjusted” refers to operating performance measures that exclude acquisition, integration and other expenses and inventory step-up. This press release also includes adjusted performance measures that exclude the effect of share-based payment, which is also a non-GAAP financial measure. 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 ability to successfully integrate acquired businesses, the outcome of the Department of Justice investigations announced in March 2005 and June 2006, price and product competition, rapid technological development, demographic changes, dependence on new product development, the mix of our products and services, supply and prices of raw materials and products, customer demand for our products and services, control of costs and expenses, our ability to form and implement alliances, international growth, governmental laws and regulations affecting our U.S. and international businesses, including tax obligations and risks, product liability and intellectual property litigation losses, reimbursement levels from third-party payors, general industry and market conditions and growth rates and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations. 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.

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ZIMMER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006 and 2005
(in millions, except per share amounts, unaudited)

	2006		2005			% Inc/Dec
Net Sales	$	819.8	$	762.5			8	%
Cost of products sold		183.2		174.5			5
Gross Profit		636.6		588.0			8
Research and development		46.7		43.9			6
Selling, general and administrative		330.4		295.8			12
Acquisition, integration and other		5.0		7.7			(35	)
Operating expenses		382.1		347.4			10
Operating Profit		254.5		240.6			6
Interest income (expense)		0.6		(2.1	)		125
Earnings before income taxes and minority interest		255.1		238.5			7
Provision for income taxes		71.9		69.7			3
Minority interest		0.1		(0.2	)		188
Net Earnings	$	183.3	$	168.6			9
Earnings Per Common Share
Basic	$	0.76	$	0.68			12
Diluted	$	0.76	$	0.67			13
Weighted Average Common Shares Outstanding
Basic		240.4		247.4
Diluted		242.6		250.2

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ZIMMER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 and 2005
(in millions, except per share amounts, unaudited)

	2006			2005			% Inc/(Dec)
Net Sales	$	2,561.8		$	2,437.8			5	%
Cost of products sold		572.6			553.6			3
Gross Profit		1,989.2			1,884.2			6
Research and development		142.7			129.6			10
Selling, general and administrative		1,010.1			945.9			7
Acquisition, integration and other		9.5			34.7			(73	)
Operating expenses		1,162.3			1,110.2			5
Operating Profit		826.9			774.0			7
Interest income (expense)		2.3			(13.5	)		(117	)
Earnings before income taxes and minority interest		829.2			760.5			9
Provision for income taxes		239.0			227.0			5
Minority interest		(0.4	)		(0.6	)		(38	)
Net Earnings	$	589.8		$	532.9			11
Earnings Per Common Share
Basic	$	2.41		$	2.16			12
Diluted	$	2.39		$	2.13			12
Weighted Average Common Shares Outstanding
Basic		244.6			246.8
Diluted		246.8			249.7

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ZIMMER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2006 and DECEMBER 31, 2005
(in millions)

	September 30,		December 31,
	2006		2005
	(unaudited)
Assets
Current Assets:
Cash and equivalents	$	275.6	$	233.2
Restricted cash		2.3		12.1
Receivables, net		589.4		524.2
Inventories, net		630.9		583.7
Other current assets		208.1		222.4
Total current assets		1,706.3		1,575.6
Property, plant and equipment, net		751.1		708.8
Goodwill		2,532.6		2,428.8
Intangible assets, net		731.1		756.6
Other assets		187.4		252.1
Total Assets	$	5,908.5	$	5,721.9
Liabilities and Shareholders’ Equity
Current liabilities	$	678.8	$	606.9
Other long-term liabilities		322.2		348.3
Long-term debt		100.9		81.6
Minority interest		2.6		2.3
Shareholders’ equity		4,804.0		4,682.8
Total Liabilities and Shareholders’ Equity	$	5,908.5	$	5,721.9

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ZIMMER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 and 2005
(in millions, unaudited)

	2006			2005
Cash flows provided by (used in) operating activities
Net earnings	$	589.8		$	532.9
Depreciation and amortization		144.8			136.0
Share-based compensation		56.0			—
Inventory step-up		—			4.6
Income tax benefits from stock option exercises		5.8			33.8
Excess income tax benefits from stock option exercises		(3.7	)		—
Changes in operating assets and liabilities
Income taxes		67.6			77.7
Receivables		(47.9	)		(38.8	)
Inventories		(34.5	)		(75.6	)
Accounts payable and accrued expenses		22.7			(30.9	)
Other assets and liabilities		(7.0	)		(12.0	)
Net cash provided by operating activities		793.6			627.7
Cash flows provided by (used in) investing activities
Additions to instruments		(93.0	)		(129.6	)
Additions to other property, plant and equipment		(84.4	)		(65.5	)
Implex acquisition, net of acquired cash		(8.5	)		—
Proceeds from sale of property, plant and equipment		16.2			—
Other		(5.0	)		(9.7	)
Net cash used in investing activities		(174.7	)		(204.8	)
Cash flows provided by (used in) financing activities
Proceeds from issuance of common stock		25.4			75.1
Excess income tax benefits from stock option exercises		3.7			—
Repurchase of common stock		(630.9	)		—
Net proceeds/(payments) on lines of credit		18.8			(5.3	)
Payments on term loan		—			(550.0	)
Debt issuance costs		—			(1.9	)
Net cash used in financing activities		(583.0	)		(482.1	)
Effect of exchange rates on cash and equivalents		6.5			(3.6	)
Increase (decrease) in cash and equivalents		42.4			(62.8	)
Cash and equivalents, beginning of period		233.2			154.6
Cash and equivalents, end of period	$	275.6		$	91.8

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ZIMMER HOLDINGS, INC.
NET SALES BY GEOGRAPHIC SEGMENT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 and 2005
(in millions, unaudited)

	Three Months Ended September 30,							Nine Months Ended September 30,
	2006		2005		% Increase			2006		2005		% Increase
Americas	$	502.4	$	473.3		6	%	$	1,539.3	$	1,448.4		6	%
Europe		196.9		178.0		11			664.0		640.7		4
Asia Pacific		120.5		111.2		8			358.5		348.7		3
Total	$	819.8	$	762.5		8		$	2,561.8	$	2,437.8		5

ZIMMER HOLDINGS, INC.
NET SALES BY PRODUCT CATEGORY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 and 2005
(in millions, unaudited)

	Three Months Ended September 30,							Nine Months Ended September 30,
	2006		2005		% Inc/(Dec)			2006		2005		% Inc/(Dec)
Reconstructive	$	676.0	$	624.4		8	%	$	2,127.3	$	2,018.7		5	%
Trauma		48.4		44.3		9			144.2		134.1		8
Spine		42.2		38.4		10			131.3		117.8		12
OSP and other		53.2		55.4		(4	)		159.0		167.2		(5	)
Total	$	819.8	$	762.5		8		$	2,561.8	$	2,437.8		5

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

	For the Three Months Ended
	September 30, 2006
				Foreign			Constant
	Reported			Exchange			Currency
	% Growth			Impact			% Growth
Geographic Segments
Americas		6	%		0	%		6	%
Europe		11			4			7
Asia Pacific		8			(3	)		11
Total		8			1			7
Product Categories
Reconstructive
Americas		8			1			7
Europe		10			4			6
Asia Pacific		7			(3	)		10
Total		8			1			7
Knees
Americas		6			0			6
Europe		13			4			9
Asia Pacific		10			(2	)		12
Total		8			1			7
Hips
Americas		8			0			8
Europe		6			4			2
Asia Pacific		3			(3	)		6
Total		7			1			6
Extremities		17			1			16
Dental		20			1			19
Trauma		9			0			9
Spine		10			0			10
OSP and other		(4	)		0			(4	)

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

	For the Nine Months Ended
	September 30, 2006
				Foreign			Constant
	Reported			Exchange			Currency
	% Growth			Impact			% Growth
Geographic Segments
Americas		6	%		0	%		6	%
Europe		4			(2	)		6
Asia Pacific		3			(5	)		8
Total		5			(1	)		6
Product Categories
Reconstructive
Americas		7			0			7
Europe		3			(2	)		5
Asia Pacific		2			(5	)		7
Total		5			(2	)		7
Knees
Americas		6			0			6
Europe		6			(3	)		9
Asia Pacific		3			(5	)		8
Total		6			(1	)		7
Hips
Americas		7			0			7
Europe		(1	)		(2	)		1
Asia Pacific		(1	)		(5	)		4
Total		3			(2	)		5
Extremities		14			(1	)		15
Dental		19			0			19
Trauma		8			(1	)		9
Spine		12			0			12
OSP and other		(5	)		0			(5	)

15

ZIMMER HOLDINGS, INC.
Reconciliation of Net Earnings, Adjusted Net Earnings and
Adjusted Net Earnings, excluding the effects of share-based payment
For the Three Months Ended September 30, 2006 and 2005
(in millions, unaudited)

	Three Months
	Ended September 30,
	2006			2005
Net Earnings	$	183.3		$	168.6
Acquisition, integration and other		5.0			7.7
Inventory step-up		—			0.5
Tax benefit of acquisition, integration and other and inventory step-up		(1.7	)		(2.7	)
Adjusted Net Earnings		186.6			174.1
Share-based payment, net of tax		12.2			—
Adjusted Net Earnings, excluding the effects of share-based payment	$	198.8		$	174.1

ZIMMER HOLDINGS, INC.
Reconciliation of Net Earnings, Adjusted Net Earnings and
Adjusted Net Earnings, excluding the effects of share-based payment
For the Nine Months Ended September 30, 2006 and 2005
(in millions, unaudited)

	Nine Months
	Ended September 30,
	2006			2005
Net Earnings	$	589.8		$	532.9
Acquisition, integration and other		9.5			34.7
Inventory step-up		—			4.6
Tax benefit of acquisition, integration and other and inventory step-up		(1.6	)		(12.0	)
Adjusted Net Earnings		597.7			560.2
Share-based payment, net of tax		39.0			—
Adjusted Net Earnings, excluding the effects of share-based payment	$	636.7		$	560.2

16

ZIMMER HOLDINGS, INC.
Reconciliation of Diluted EPS, Adjusted Diluted EPS and
Adjusted Diluted EPS, excluding the effects of share-based payment
For the Three Months Ended September 30, 2006 and 2005
(unaudited)

	Three Months
	Ended September 30,
	2006			2005
Diluted EPS	$	0.76		$	0.67
Acquisition, integration and other		0.02			0.03
Inventory step-up		—			—
Tax benefit of acquisition, integration and other and inventory step-up		(0.01	)		—
Adjusted Diluted EPS		0.77			0.70
Share-based payment, net of tax		0.05			—
Adjusted Diluted EPS, excluding the effects of share-based payment	$	0.82		$	0.70

ZIMMER HOLDINGS, INC.
Reconciliation of Diluted EPS, Adjusted Diluted EPS and
Adjusted Diluted EPS, excluding the effects of share-based payment
For the Nine Months Ended September 30, 2006 and 2005
(unaudited)

	Nine Months
	Ended September 30,
	2006			2005
Diluted EPS	$	2.39		$	2.13
Acquisition, integration and other		0.04			0.14
Inventory step-up		—			0.02
Tax benefit of acquisition, integration and other and inventory step-up		(0.01	)		(0.05	)
Adjusted Diluted EPS		2.42			2.24
Share-based payment, net of tax		0.16			—
Adjusted Diluted EPS, excluding the effects of share-based payment	$	2.58		$	2.24

17

ZIMMER HOLDINGS, INC.
Reconciliation of Net Margin, Adjusted Net Margin and
Adjusted Net Margin excluding the effects of share-based payment
For the Three and Nine Months Ended September 30, 2006
(unaudited)

	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	2006			2006
Net Margin		22.4	%		23.0	%
Acquisition, integration and other, net of tax		0.4			0.3
Adjusted Net Margin		22.8			23.3
Share-based payment, net of tax		1.4			1.6
Adjusted Net Margin excluding the effects of share-based payment		24.2	%		24.9	%

ZIMMER HOLDINGS, INC.
Reconciliation of Operating Margin, Adjusted Operating Margin and
Adjusted Operating Margin excluding the effects of share-based payment
For the Three and Nine Months Ended September 30, 2006
(unaudited)

	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	2006			2006
Operating Margin		31.1	%		32.3	%
Acquisition, integration and other		0.6			0.3
Adjusted Operating Margin		31.7			32.6
Share-based payment		2.0			2.2
Adjusted Operating Margin excluding the effects of share-based payment		33.7	%		34.8	%

18

ZIMMER HOLDINGS, INC.
Reconciliation of Gross Margin, Adjusted Gross Margin and
Adjusted Gross Margin excluding the effects of share-based payment
For the Three and Nine Months Ended September 30, 2006
(unaudited)

	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	2006			2006
Gross Margin and Adjusted Gross Margin		77.7	%		77.6	%
Share-based payment		0.3			0.3
Adjusted Gross Margin excluding the effects of share-based payment		78.0	%		77.9	%

ZIMMER HOLDINGS, INC.
RECONCILIATION OF 2006 PROJECTED DILUTED EPS
AND PROJECTED ADJUSTED DILUTED EPS
(unaudited)

Projected Three Months Ended December 31, 2006:

Diluted EPS	$	0.98
Acquisition, integration and other, net of tax		0.01
Adjusted Diluted EPS	$	0.99

19