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Zimmer Reports Fourth Quarter and 2012 Financial Results

           Zimmer Reports Fourth Quarter and 2012 Financial Results

PR Newswire

WARSAW, Ind., Jan. 31, 2013

WARSAW, Ind., Jan. 31, 2013 /PRNewswire/ --

  oNet Sales of $1.18 billion for the fourth quarter represent an increase of
    1.1% reported over the prior year period (2.1% constant currency)
  oDiluted EPS for the fourth quarter were $0.88 reported, an increase of
    1.1% over the prior year period, and $1.51 adjusted, an increase of 11.0%
    over the prior year period
  oNet Sales of $4.47 billion for the full year represent an increase of 0.4%
    reported over the prior year (2.3% constant currency)
  oDiluted EPS for the full year were $4.29 reported, an increase of 6.5%
    over the prior year, and $5.30 adjusted, an increase of 10.4% over the
    prior year

Zimmer Holdings, Inc. (NYSE and SIX: ZMH) today reported financial results for
the quarter and year ended December 31, 2012. The Company reported fourth
quarter net sales of $1.18 billion, an increase of 1.1% reported and 2.1%
constant currency over the fourth quarter of 2011. Diluted earnings per share
for the quarter were $0.88 reported and $1.51 adjusted, an increase of 11.0%
adjusted over the prior year period. Full-year net sales were $4.47 billion,
an increase of 0.4% reported and 2.3% constant currency over the prior year.
Diluted earnings per share for the year were $4.29 reported and $5.30
adjusted, an increase of 10.4% adjusted over the prior year.

"Throughout 2012, Zimmer successfully executed our value creation agenda,
including innovation and growth initiatives, global transformation programs
and capital allocation strategies," said David Dvorak, Zimmer President and
CEO. "For the fourth quarter and full year, Zimmer delivered on our financial
commitments, generating double-digit growth in adjusted earnings per share and
significant operating margin improvements. We also achieved key regulatory
and commercialization milestones for a number of innovative products and
technologies, both in our core franchises and in new, adjacent musculoskeletal
markets. These clinically-differentiated offerings will drive accelerated
top-line growth in 2013and beyond."

Net earnings for the fourth quarter were $152.8 million on a reported basis
and $263.5 million on an adjusted basis, an increase of 7.6% adjusted over the
prior year period. Operating cash flow for the fourth quarter was $368.0
million. Net earnings for the full year 2012 were $755.0 million on a
reported basis and $932.5 million on an adjusted basis, an increase of 3.0%
adjusted over the prior year. Operating cash flow for the full year was
$1,151.9 million.

During the quarter, the Company utilized $140 million of cash to acquire 2.1
million shares. Consequently, for the full year 2012, the Company utilized
$485 million of cash to acquire 7.7 million shares. As previously announced,
the Company has a share repurchase program that authorizes purchases of up
to$1.5 billionof the Company's common stock throughDecember 31, 2014. The
Company also paid $94 million in cash dividends to stockholders during 2012.

The Company recorded a non-cash charge for goodwill impairment of $96 million
net of tax or $0.55 per diluted share related to the Company's U.S. Spine
reporting unit during the fourth quarter. The Company conducts annual
impairment tests during the fourth quarter. A number of factors have resulted
in a change in the outlook for the spine market in the U.S., including
pressure from payers on utilization of certain types of procedures and on
reimbursement rates and prices generally. The change in outlook for the
market, together with ongoing Company-specific challenges related to the U.S.
Spine reporting unit, contributed to the decrease in the implied fair value of
the unit compared with prior year.

The Company also recently completed a legal entity restructuring of certain
international operations that led to recognition of deferred tax assets
related to foreign tax credits. This resulted in a credit to income taxes in
the quarter, net of other unrelated tax charges, of $34 million. This credit,
together with the goodwill impairment charge, certain claims and special
items, are excluded from the Company's non-GAAP adjusted earnings measure, as
further described herein.

Guidance

The Company expects full-year revenues for 2013 to increase between 2.5% and
4.5% on a constant currency basis. The Company estimates that foreign
currency translation will decrease revenues by approximately 0.5% for the full
year 2013, resulting in reported revenue growth between 2% and 4%. Full-year
2013 diluted earnings per share are projected to be in a range of $5.05 to
$5.25 on a reported basis and $5.65 to $5.85 on an adjusted basis.

In 2013, the Company expects to continue global restructuring and
transformation initiatives designed to streamline business operations and
support functions. Savings from these initiatives will enable the Company to
absorb the medical device excise tax, continue to support investments in
innovation and commercialization of new products and technologies, expand
global sales channels and drive sustained growth in earnings and cash flow.
The programs to be completed in 2013 are expected to generate annualized
pre-tax savings of more than $80 million, including $30 million to $40 million
to be realized in 2013.

The Company expects to record 2013 pre-tax charges of $120 million to $130
million as details of the various programs are finalized and implemented. The
Company also expects to incur an additional $5 million to $15 million for
certain acquisition and integration costs connected with the acquisitions of
Dornoch Medical Systems, Inc., Exopro and third party distributors around the
world.

Conference Call

The Company will conduct its fourth quarter 2012 investor conference call
today, January 31, 2013, at 8:00 a.m. Eastern Time. The live audio webcast
can be accessed via Zimmer's Investor Relations website
athttp://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 (888)
878-3901. International callers should dial (706) 634-9520. A digital
recording will be available two hours after the completion of the conference
call fromJanuary 31, 2013, toFebruary 14, 2013. To access the recording,
US/Canada callers should dial (855) 859-2056 or (800) 585-8367, or for
International callers, dial (404) 537-3406, and enter the conference ID
87263682. 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 athttp://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.

NET SALES - THREE MONTHS ENDED DECEMBER 31, 2012
(in millions, unaudited)
                                           Constant
                      Net       Reported   Currency
                      Sales     % Growth  % Growth
Geographic Segments
   Americas         $ 644     4      %   4     %
   Europe             326     (4)        (1)
   Asia Pacific       211     1          2
   Total          1,181   1          2
Product Categories
  Reconstructive
   Americas           464     2          1
   Europe             252     (5)        (2)
   Asia Pacific       156     1          2
   Total          872     (1)        -
      Knees
       Americas       272     1          -
       Europe         124     (3)        -
       Asia Pacific   80      4          4
       Total      476     -          1
      Hips
       Americas       156     2          2
       Europe         120     (8)        (5)
       Asia Pacific   73      (2)        -
       Total      349     (2)        (1)
      Extremities       47      7          7
  Dental                61      (4)        (2)
  Trauma                84      9          10
  Spine                 54      (5)        (5)
  Surgical and other    110     18         19

NET SALES - YEAR ENDED DECEMBER 31, 2012
(in millions, unaudited)
                                         Constant
                    Net       Reported   Currency
                    Sales     % Growth  % Growth
Geographic Segments
  Americas        $ 2,476   1      %   2     %
  Europe            1,178   (3)        3
  Asia Pacific      818     3          3
  Total         4,472   -          2
Product Categories
 Reconstructive
  Americas          1,800   -          -
  Europe            922     (4)        2
  Asia Pacific      609     3          3
  Total         3,331   -          1
    Knees
     Americas       1,059   (1)        (1)
     Europe         447     (3)        3
     Asia Pacific   309     5          5
     Total      1,815   (1)        1
    Hips
     Americas       607     1          1
     Europe         446     (5)        1
     Asia Pacific   289     2          1
     Total      1,342   (1)        1
    Extremities       174     6          8
                      -
 Dental               238     (4)        (2)
 Trauma               308     8          9
 Spine                209     (7)        (6)
 Surgical and other   386     11         12

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 2012 sales were approximately $4.5
billion. The Company is supported by the efforts of more than 8,500 employees
worldwide.

Website Information

We routinely post important information for investors on our
website,www.zimmer.com, in the "Investor Relations" section. We use this
website as a means of disclosing material, non-public information and for
complying with our disclosure obligations under Regulation FD. Accordingly,
investors should monitor the Investor Relations section of our website, in
addition to following our press releases, SEC filings, public conference
calls, presentations and webcasts. The information contained on, or that may
be accessed through, our website is not incorporated by reference into, and is
not a part of, this document.

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 and other inventory
charges, the provision for certain Durom® Acetabular Component product claims,
special items, goodwill impairment and certain tax adjustments. Included in
special items are acquisition and integration costs and asset impairment
charges related to prior acquisitions as well as employee termination
benefits, consulting and professional fees, certain litigation matters,
dedicated personnel expenses, certain contract terminations and asset
impairment charges connected with global restructuring and operational
excellence initiatives. 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, the success of
our quality and operational improvement initiatives; price and product
competition; changes in customer demand for our products and services caused
by demographic changes or other factors; the impact of health care reform
measures in the U.S. including the impact of the new excise tax on medical
devices, reductions in reimbursement levels from third-party payors and
cost-containment efforts of health care purchasing organizations; 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; changes in tax obligations
arising from tax reform measures or examinations by tax authorities; product
liability and intellectual property litigation losses; our ability to retain
the independent agents and distributors who market our products; and 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.
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, 2012 and 2011
(in millions, except per share amounts, unaudited)
                                  2012             2011            % Inc/(Dec)
Net Sales                       $   1,180.5    $   1,167.3   1       %
Cost of products sold           298.9            303.2           (1)
Gross Profit                    881.6            864.1           2
Research and development        55.3             64.9            (15)
Selling, general and             460.5            462.0           -
administrative
Goodwill impairment             96.0             -               100
Certain claims                  15.0             107.8           (86)
Special items                   54.3             28.2            92
 Operating expenses         681.1            662.9           3
Operating Profit                200.5            201.2           -
Interest income                 4.9              3.5             40
Interest expense                (18.9)           (16.2)          17
Earnings before income taxes   186.5            188.5           (1)
Provision for income taxes      34.2             32.4            6
Net earnings                    152.3            156.1           (2)
Less: Net loss attributable to  (0.5)            (0.5)           -
noncontrolling interest
Net Earnings of Zimmer Holdings, $    152.8   $    156.6  (2)
Inc.
Earnings Per Common Share
 Basic                       $     0.88  $           -
                                                   0.88
 Diluted                     $     0.88  $           1
                                                   0.87
Weighted Average Common Shares
Outstanding
 Basic                       172.8            178.7
 Diluted                     174.1            179.6
Cash dividends declared per      $     0.18  $           -
common share                                      0.18
Certain amounts in the 2011 consolidated statement of earnings have been
reclassified to conform
to the 2012 presentation.



FOR THE YEAR ENDED DECEMBER 31, 2012 and 2011
(in millions, except per share amounts, unaudited)
                                 2012            2011            % Inc/(Dec)
Net Sales                      $   4,471.7   $   4,451.8   -           %
Cost of products sold          1,125.2         1,122.0         -
Gross Profit                   3,346.5         3,329.8         1
Research and development       225.6           238.4           (5)
Selling, general and            1,807.1         1,834.3         (1)
administrative
Goodwill impairment            96.0            -               100
Certain claims                 15.0            157.8           (90)
Special items                  155.4           75.2            107
 Operating expenses        2,299.1         2,305.7         -
Operating Profit               1,047.4         1,024.1         2
Interest income                15.6            10.1            54
Interest expense               (72.9)          (55.3)          32
Earnings before income taxes  990.1           978.9           1
Provision for income taxes     237.2           218.9           8
Net earnings                   752.9           760.0           (1)
Less: Net loss attributable to (2.1)           (0.8)           181
noncontrolling interest
Net Earnings of Zimmer          $    755.0  $    760.8  (1)
Holdings, Inc.
Earnings Per Common Share
 Basic                    $           $           7
                                 4.32           4.05
 Diluted                  $           $           6
                                 4.29           4.03
Weighted Average Common Shares
Outstanding
 Basic                      174.9           187.6
 Diluted                    176.0           188.7
Cash dividends declared per     $           $           200
common share                    0.54           0.18
Certain amounts in the 2011 consolidated statement of earnings have been
reclassified to conform
to the 2012 presentation.



ZIMMER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, unaudited)
                                       December 31,      December 31,
                                       2012                2011
Assets
Current Assets:
 Cash and cash                       $            $       
equivalents                           884.3               768.3
 Short-term investments             671.6               455.5
 Receivables, net                   884.6               838.8
 Inventories                        995.3               929.8
 Other current assets               272.9               284.2
 Total current assets           3,708.7             3,276.6
Property, plant and equipment,        1,210.7             1,207.3
net
Goodwill                             2,571.8             2,626.0
Intangible assets, net               740.7               798.5
Other assets                         780.5               606.9
Total Assets                         $              $     
                                       9,012.4            8,515.3
Liabilities and Stockholders'
Equity
Current liabilities                  $            $       
                                       765.9               723.8
Short-term debt                      100.1               143.3
Other long-term                       559.3               557.4
liabilities
Long-term debt                       1,720.8             1,576.0
Stockholders' equity                 5,866.3             5,514.8
Total Liabilities and Stockholders'   $              $     
Equity                                9,012.4            8,515.3



ZIMMER HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2012 and 2011
(in millions, unaudited)
                                                 2012           2011
Cash flows provided by (used in) operating
activities
 Net earnings                                  $    752.9 $    760.0
 Depreciation and amortization                 363.1          359.9
 Goodwill impairment                           96.0           -
 Share-based compensation                      55.0           60.5
 Income tax benefits from employee stock        11.0           12.9
 compensation plans
 Excess income tax benefits from employee       (2.7)          (5.0)
 stock compensation plans
 Inventory step-up                             4.8            11.4
 Changes in operating assets and liabilities,
 net of acquired assets and liabilities
  Income taxes                              (5.6)          (5.1)
  Receivables                               (45.5)         (63.2)
  Inventories                               (67.5)         7.2
  Accounts payable and accrued expenses     47.8           20.0
  Other assets and liabilities              (57.4)         18.3
 Net cash provided by operating activities     1,151.9        1,176.9
Cash flows provided by (used in) investing
activities
 Additions to instruments                      (148.9)        (155.4)
 Additions to other property, plant and         (114.7)        (113.8)
 equipment
 Purchases of investments                      (1,130.1)      (662.1)
 Sales of investments                          878.5          394.8
 Investments in other assets                   (76.9)         (87.9)
 Net cash used in investing activities         (592.1)        (624.4)
Cash flows provided by (used in) financing
activities
 Proceeds from issuance of notes               -              549.3
 Proceeds from term loans                      147.3          -
 Net proceeds under revolving credit            (50.1)         0.5
 facilities
 Dividends paid to stockholders                (94.4)         -
 Proceeds from employee stock compensation      46.9           43.4
 plans
 Excess income tax benefits from employee       2.7            5.0
 stock compensation plans
 Debt issuance costs                           (3.3)          (4.0)
 Repurchase of common stock                    (485.6)        (1,050.0)
 Net cash used in financing activities         (436.5)        (455.8)
Effect of exchange rates on cash and cash       (7.3)          2.7
equivalents
 Increase in cash and cash equivalents         116.0          99.4
Cash and cash equivalents, beginning of         768.3          668.9
period
Cash and cash equivalents, end of period       $    884.3 $    768.3



ZIMMER HOLDINGS, INC.
NET SALES BY GEOGRAPHIC SEGMENT
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2012 and 2011
(in millions, unaudited)
                   Three Months Ended December   Year Ended December 31,
                   31,
                   2012     2011     %            2012     2011    %
                                     Inc/(Dec)                     Inc/(Dec)
Americas         $      $      4          % $       $      1         %
                   644.1   620.4                2,476.3  2,440.8
Europe           325.8    338.1    (4)          1,177.4  1,214.5 (3)
Asia Pacific     210.6    208.8    1            818.0    796.5   3
Total            $       $       1            $       $      -
                   1,180.5  1,167.3               4,471.7  4,451.8
ZIMMER HOLDINGS, INC.
NET SALES BY PRODUCT CATEGORY
FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2012 and 2011
(in millions, unaudited)
                   Three Months Ended December   Year Ended December 31,
                   31,
                   2012     2011     %            2012     2011    %
                                     Inc/(Dec)                     Inc/(Dec)
Reconstructive
   Knees         $      $      -          % $       $      (1)       %
                   476.1   475.3                1,814.8  1,825.1
   Hips          349.0    357.7    (2)          1,342.0  1,355.6 (1)
   Extremities   46.8     43.8     7            173.8    163.4   6
                   871.9    876.8    (1)          3,330.6  3,344.1 -
Dental           61.3     63.5     (4)          237.7    248.1   (4)
Trauma           84.0     77.3     9            307.9    285.8   8
Spine            53.5     56.5     (5)          208.9    225.0   (7)
Surgical and      109.8    93.2     18           386.6    348.8   11
other
Total            $       $       1            $       $      -
                   1,180.5  1,167.3               4,471.7  4,451.8



ZIMMER HOLDINGS, INC.
RECONCILIATION OF REPORTED % GROWTH TO
CONSTANT CURRENCY % GROWTH
(unaudited)
                    For the Three Months Ended
                    December 31, 2012
                              Foreign   Constant
                    Reported  Exchange  Currency
                    % Growth  Impact    % Growth
Geographic Segments
  Americas        4     %   -     %   4     %
  Europe          (4)       (3)       (1)
  Asia Pacific    1         (1)       2
  Total       1         (1)       2
Product Categories
 Reconstructive
  Americas        2         1         1
  Europe          (5)       (3)       (2)
  Asia Pacific    1         (1)       2
  Total       (1)       (1)       -
    Knees
     Americas     1         1         -
     Europe       (3)       (3)       -
     Asia Pacific 4         -         4
     Total    -         (1)       1
    Hips
     Americas     2         -         2
     Europe       (8)       (3)       (5)
     Asia Pacific (2)       (2)       -
     Total    (2)       (1)       (1)
    Extremities     7         -         7
 Dental             (4)       (2)       (2)
 Trauma             9         (1)       10
 Spine              (5)       -         (5)
 Surgical and other 18        (1)       19



ZIMMER HOLDINGS, INC.
RECONCILIATION OF REPORTED % GROWTH TO
CONSTANT CURRENCY % GROWTH
(unaudited)
                    For the Year Ended
                    December 31, 2012
                              Foreign   Constant
                    Reported  Exchange  Currency
                    % Growth  Impact    % Growth
Geographic Segments
  Americas        1     %   (1)   %   2     %
  Europe          (3)       (6)       3
  Asia Pacific    3         -         3
  Total       -         (2)       2
Product Categories
 Reconstructive
  Americas        -         -         -
  Europe          (4)       (6)       2
  Asia Pacific    3         -         3
  Total       -         (1)       1
    Knees
     Americas     (1)       -         (1)
     Europe       (3)       (6)       3
     Asia Pacific 5         -         5
     Total    (1)       (2)       1
    Hips
     Americas     1         -         1
     Europe       (5)       (6)       1
     Asia Pacific 2         1         1
     Total    (1)       (2)       1
    Extremities     6         (2)       8
 Dental             (4)       (2)       (2)
 Trauma             8         (1)       9
 Spine              (7)       (1)       (6)
 Surgical and other 11        (1)       12





ZIMMER HOLDINGS, INC.
Reconciliation of Net Earnings and Adjusted Net Earnings
For the Three Months Ended December 31, 2012 and 2011
(in millions, unaudited)
                                                  Three Months
                                                  Ended December 31,
                                                  2012           2011
Net Earnings of Zimmer Holdings, Inc.           $    152.8  $    156.6
Inventory step-up and other inventory charges   2.3            1.8
Goodwill impairment                             96.0           -
Certain claims                                  15.0           107.8
Special items                                   54.3           28.2
Taxes on above items and other certain tax       (56.9)         (49.4)
adjustments*
Adjusted Net Earnings                           $    263.5  $    245.0
* The tax effect is calculated based upon the statutory rates for the
jurisdictions where the items
 were incurred.
ZIMMER HOLDINGS, INC.
Reconciliation of Net Earnings and Adjusted Net Earnings
For the Year Ended December 31, 2012 and 2011
(in millions, unaudited)
                                                  Year
                                                  Ended December 31,
                                                  2012           2011
Net Earnings of Zimmer Holdings, Inc.           $    755.0  $    760.8
Inventory step-up and other inventory charges   4.8            11.4
Goodwill impairment                             96.0           -
Certain claims                                  15.0           157.8
Special items                                   155.4          75.2
Taxes on above items and other certain tax       (93.7)         (99.6)
adjustments*
Adjusted Net Earnings                           $    932.5  $    905.6
* 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, 2012 and 2011
(unaudited)
                                          Three Months
                                          Ended December 31,
                                          2012                2011
Diluted EPS                             $     0.88     $     0.87
Inventory step-up and other inventory    0.01                0.01
charges
Goodwill impairment                     0.55                -
Certain claims                          0.09                0.60
Special items                           0.31                0.16
Taxes on above items and other certain   (0.33)              (0.28)
tax adjustments*
Adjusted Diluted EPS                    $     1.51     $     1.36
* The tax effect is calculated based upon the statutory rates for the
jurisdictions where the itemswere incurred.
ZIMMER HOLDINGS, INC.
Reconciliation of Diluted EPS and Adjusted Diluted EPS
For the Year Ended December 31, 2012 and 2011
(unaudited)
                                          Year
                                          Ended December 31,
                                          2012                2011
Diluted EPS                             $     4.29     $     4.03
Inventory step-up and other inventory    0.03                0.06
charges
Goodwill impairment                     0.54                -
Certain claims                          0.09                0.84
Special items                           0.88                0.40
Taxes on above items and other certain   (0.53)              (0.53)
tax adjustments*
Adjusted Diluted EPS                    $     5.30     $     4.80
* The tax effect is calculated based upon the statutory rates for the
jurisdictions where the itemswere incurred.





ZIMMER HOLDINGS, INC.
Reconciliation of 2013 Projected Diluted EPS
and Projected Adjusted Diluted EPS
(unaudited)
Projected Year Ended December 31, 2013:  Low               High
Diluted EPS                              5.05              5.25
Inventory step-up, other inventory        0.82              0.82
charges and special items
Taxes on above items                     (0.22)            (0.22)
Adjusted Diluted EPS                     $      5.65  $      5.85
* The tax effect is calculated based upon the statutory rates for the
jurisdictions where the items
 are projected to be incurred.



SOURCE Zimmer Holdings, Inc.

Website: http://www.zimmer.com
Contact: Media - Garry R. Clark, +1-574-372-4493, garry.clark@zimmer.com;
Investors - Robert J. Marshall Jr., +1-574-371-8042,
robert.marshall@zimmer.com