ZIMMER BIOMET HOLDINGS, INC. - FORM 8-K - EX-99.1

Attached files

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8-K - 8-K - ZIMMER BIOMET HOLDINGS, INC.	zbh-8k_20180402.htm

345 E. Main St.
Warsaw, IN 46580
www.zimmerbiomet.com	Exhibit 99.1

Media	Investors
Monica Kendrick	Cole Lannum
(574) 372-4989	(574) 371-9480
Monica.Kendrick@ZimmerBiomet.com	Cole.Lannum@ZimmerBiomet.com
	Derek Davis (574) 372-4250 Derek.Davis@ZimmerBiomet.com
	Barbara Goslee
	(574) 371-9449
	Barb.Goslee@ZimmerBiomet.com

The following supplemental financial information presents, for informational purposes only, certain previously-reported financial information of Zimmer Biomet Holdings, Inc. (the “Company”), as adjusted to reflect the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) and Accounting Standards Update No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”).

Certain of the previously-reported financial information consisted of reconciliations of financial measures not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) to the most directly comparable GAAP measures. These reconciliations are presented below, updated to utilize the revised GAAP financial measures, which have been adjusted to reflect the adoption of ASU 2014-09 and ASU 2017-07, in the reconciliations. The 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.

Revised gross profit, revised gross margin, revised operating profit (loss) and revised operating profit (loss) margin (in each case, revised to reflect the adoption of ASU 2014-09 and ASU

2017-07) are presented on a GAAP basis and on an adjusted basis. Adjusted revised gross profit and adjusted revised gross margin exclude the effects of inventory step-up, other inventory and manufacturing-related charges and intangible asset amortization. Adjusted revised operating profit and adjusted revised operating profit margin exclude the effects of inventory step-up, other inventory and manufacturing-related charges, intangible asset amortization, goodwill impairment and special items.

Management of the Company uses these non-GAAP financial measures internally to evaluate the performance of the business and believes they are useful measures that provide meaningful supplemental information to investors to consider when evaluating the performance of the Company. Management believes these measures offer the ability to make period-to-period comparisons that are not impacted by certain items that can cause dramatic changes in reported operating results, to perform trend analysis, to better identify operating trends that may otherwise be masked or distorted by these types of items and to provide additional transparency of certain items. In addition, certain of these non-GAAP financial measures are used as performance metrics in the Company's incentive compensation programs.

Certain amounts in the 2016 and 2017 net sales by product categories have been reclassified to conform to the 2018 presentation.

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 2016
(in millions, except per share amounts, unaudited)

	As Originally Reported			Adjustments ⁽¹⁾			As Adjusted
Net Sales	$	1,904.0		$	(3.2	)	$	1,900.8
Cost of products sold, excluding intangible asset amortization		640.6			-			640.6
Intangible asset amortization		126.6			-			126.6
Research and development		85.7			-			85.7
Selling, general and administrative		716.9			(2.0	)		714.9
Special items		88.7			-			88.7
Operating expenses		1,658.5			(2.0	)		1,656.5
Operating Profit		245.5			(1.2	)		244.3
Other expense, net		(3.8	)		1.2			(2.6	)
Interest income		1.3			-			1.3
Interest expense		(88.2	)		-			(88.2	)
Earnings before income taxes		154.8			-			154.8
Provision for income taxes		46.1			-			46.1
Net Earnings		108.7			-			108.7
Less: Net Loss attributable to noncontrolling interest		(0.1	)		-			(0.1	)
Net Earnings of Zimmer Biomet Holdings, Inc.	$	108.8		$	-		$	108.8

Earnings Per Common Share
Basic	$	0.54		$	-		$	0.54
Diluted	$	0.54		$	-		$	0.54
Weighted Average Common Shares Outstanding
Basic		200.1			-			200.1
Diluted		202.2			-			202.2


⁽¹⁾ New accounting standard adjustments include a reclassication of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09 and a reclassification of certain components of pension expense from Selling, general and administrative expenses to Other expense, net due to the adoption of ASU 2017-07.

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED JUNE 30, 2016
(in millions, except per share amounts, unaudited)

	As Originally Reported			Adjustments ⁽¹⁾			As Adjusted
Net Sales	$	1,934.0		$	(3.9	)	$	1,930.1
Cost of products sold, excluding intangible asset amortization		640.1			-			640.1
Intangible asset amortization		133.8			-			133.8
Research and development		88.6			-			88.6
Selling, general and administrative		732.0			(2.7	)		729.3
Special items		137.9			-			137.9
Operating expenses		1,732.4			(2.7	)		1,729.7
Operating Profit		201.6			(1.2	)		200.4
Other expense, net		(3.8	)		1.2			(2.6	)
Interest income		0.8			-			0.8
Interest expense		(88.1	)		-			(88.1	)
Earnings before income taxes		110.5			-			110.5
Provision for income taxes		142.2			-			142.2
Net (Loss)		(31.7	)		-			(31.7	)
Less: Net Loss attributable to noncontrolling interest		(0.4	)		-			(0.4	)
Net (Loss) of Zimmer Biomet Holdings, Inc.	$	(31.3	)	$	-		$	(31.3	)

(Loss) Per Common Share
Basic	$	(0.16	)	$	-		$	(0.16	)
Diluted	$	(0.16	)	$	-		$	(0.16	)
Weighted Average Common Shares Outstanding
Basic		199.4			-			199.4
Diluted		199.4			-			199.4


⁽¹⁾ New accounting standard adjustments include a reclassication of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09 and a reclassification of certain components of pension expense from Selling, general and administrative expenses to Other expense, net due to the adoption of ASU 2017-07.

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016
(in millions, except per share amounts, unaudited)

	As Originally Reported			Adjustments ⁽¹⁾			As Adjusted
Net Sales	$	1,832.8		$	(3.6	)	$	1,829.2
Cost of products sold, excluding intangible asset amortization		479.3			-			479.3
Intangible asset amortization		164.3			-			164.3
Research and development		95.6			-			95.6
Selling, general and administrative		727.7			(2.4	)		725.3
Special items		170.4			-			170.4
Operating expenses		1,637.3			(2.4	)		1,634.9
Operating Profit		195.5			(1.2	)		194.3
Other (expense)/income, net		(1.1	)		1.2			0.1
Interest income		0.6			-			0.6
Interest expense		(91.5	)		-			(91.5	)
Earnings before income taxes		103.5			-			103.5
Provision for income taxes		(54.4	)		-			(54.4	)
Net Earnings		157.9			-			157.9
Less: Net Loss attributable to noncontrolling interest		(0.9	)		-			(0.9	)
Net Earnings of Zimmer Biomet Holdings, Inc.	$	158.8		$	-		$	158.8

Earnings Per Common Share
Basic	$	0.79		$	-		$	0.79
Diluted	$	0.78		$	-		$	0.78
Weighted Average Common Shares Outstanding
Basic		200.1			-			200.1
Diluted		202.9			-			202.9


⁽¹⁾ New accounting standard adjustments include a reclassication of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09 and a reclassification of certain components of pension expense from Selling, general and administrative expenses to Other expense, net due to the adoption of ASU 2017-07.

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2016
(in millions, except per share amounts, unaudited)

	As Originally Reported			Adjustments ⁽¹⁾			As Adjusted
Net Sales	$	2,013.1		$	(4.8	)	$	2,008.3
Cost of products sold, excluding intangible asset amortization		621.8			-			621.8
Intangible asset amortization		141.2			-			141.2
Research and development		95.7			-			95.7
Selling, general and administrative		756.3			(3.6	)		752.7
Special items		214.8			-			214.8
Operating expenses		1,829.8			(3.6	)		1,826.2
Operating Profit		183.3			(1.2	)		182.1
Other expense, net		(62.6	)		1.2			(61.4	)
Interest income		0.2			-			0.2
Interest expense		(90.1	)		-			(90.1	)
Earnings before income taxes		30.8			-			30.8
Provision for income taxes		(38.9	)		-			(38.9	)
Net Earnings		69.7			-			69.7
Less: Net Loss attributable to noncontrolling interest		0.1			-			0.1
Net Earnings of Zimmer Biomet Holdings, Inc.	$	69.6		$	-		$	69.6

Earnings Per Common Share
Basic	$	0.35		$	-		$	0.35
Diluted	$	0.34		$	-		$	0.34
Weighted Average Common Shares Outstanding
Basic		200.4			-			200.4
Diluted		202.5			-			202.5


⁽¹⁾ New accounting standard adjustments include a reclassication of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09 and a reclassification of certain components of pension expense from Selling, general and administrative expenses to Other expense, net due to the adoption of ASU 2017-07.

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2016
(in millions, except per share amounts, unaudited)

	As Originally Reported			Adjustments ⁽¹⁾			As Adjusted
Net Sales	$	7,683.9		$	(15.5	)	$	7,668.4
Cost of products sold, excluding intangible asset amortization		2,381.8			-			2,381.8
Intangible asset amortization		565.9			-			565.9
Research and development		365.6			-			365.6
Selling, general and administrative		2,932.9			(10.7	)		2,922.2
Special items		611.8			-			611.8
Operating expenses		6,858.0			(10.7	)		6,847.3
Operating Profit		825.9			(4.8	)		821.1
Other expense, net		(71.3	)		4.8			(66.5	)
Interest income		2.9			-			2.9
Interest expense		(357.9	)		-			(357.9	)
Earnings before income taxes		399.6			-			399.6
Provision for income taxes		95.0			-			95.0
Net Earnings		304.6			-			304.6
Less: Net Loss attributable to noncontrolling interest		(1.3	)		-			(1.3	)
Net Earnings of Zimmer Biomet Holdings, Inc.	$	305.9		$	-		$	305.9

Earnings Per Common Share
Basic	$	1.53		$	-		$	1.53
Diluted	$	1.51		$	-		$	1.51
Weighted Average Common Shares Outstanding
Basic		200.0			-			200.0
Diluted		202.4			-			202.4


⁽¹⁾ New accounting standard adjustments include a reclassication of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09 and a reclassification of certain components of pension expense from Selling, general and administrative expenses to Other expense, net due to the adoption of ASU 2017-07.

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 2017
(in millions, except per share amounts, unaudited)

	As Originally Reported			Adjustments ⁽¹⁾			As Adjusted
Net Sales	$	1,977.3		$	(4.9	)	$	1,972.4
Cost of products sold, excluding intangible asset amortization		512.9			-			512.9
Intangible asset amortization		152.0			-			152.0
Research and development		91.1			-			91.1
Selling, general and administrative		760.8			(2.6	)		758.2
Special items		110.1			-			110.1
Operating expenses		1,626.9			(2.6	)		1,624.3
Operating Profit		350.4			(2.3	)		348.1
Other expense, net		(2.8	)		2.3			(0.5	)
Interest income		0.5			-			0.5
Interest expense		(82.9	)		-			(82.9	)
Earnings before income taxes		265.2			-			265.2
Provision for income taxes		(34.1	)		-			(34.1	)
Net Earnings		299.3			-			299.3
Less: Net Loss attributable to noncontrolling interest		(0.1	)		-			(0.1	)
Net Earnings of Zimmer Biomet Holdings, Inc.	$	299.4		$	-		$	299.4

Earnings Per Common Share
Basic	$	1.49		$	-		$	1.49
Diluted	$	1.47		$	-		$	1.47

Weighted Average Common Shares Outstanding
Basic		201.1			-			201.1
Diluted		203.1			-			203.1


⁽¹⁾ New accounting standard adjustments include a reclassication of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09 and a reclassification of certain components of pension expense from Selling, general and administrative expenses to Other expense, net due to the adoption of ASU 2017-07.

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED JUNE 30, 2017
(in millions, except per share amounts, unaudited)

	As Originally Reported			Adjustments ⁽¹⁾			As Adjusted
Net Sales	$	1,954.4		$	(4.9	)	$	1,949.5
Cost of products sold, excluding intangible asset amortization		527.7			-			527.7
Intangible asset amortization		147.7			-			147.7
Research and development		90.1			-			90.1
Selling, general and administrative		748.0			(2.7	)		745.3
Special items		158.6			-			158.6
Operating expenses		1,672.1			(2.7	)		1,669.4
Operating Profit		282.3			(2.2	)		280.1
Other expense, net		(3.9	)		2.2			(1.7	)
Interest income		0.3			-			0.3
Interest expense		(82.3	)		-			(82.3	)
Earnings before income taxes		196.4			-			196.4
Provision for income taxes		12.3			-			12.3
Net Earnings		184.1			-			184.1
Less: Net Loss attributable to noncontrolling interest		(0.1	)		-			(0.1	)
Net Earnings of Zimmer Biomet Holdings, Inc.	$	184.2		$	-		$	184.2

Earnings Per Common Share
Basic	$	0.91		$	-		$	0.91
Diluted	$	0.90		$	-		$	0.90
Weighted Average Common Shares Outstanding
Basic		201.8			-			201.8
Diluted		203.7			-			203.7


⁽¹⁾ New accounting standard adjustments include a reclassication of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09 and a reclassification of certain components of pension expense from Selling, general and administrative expenses to Other expense, net due to the adoption of ASU 2017-07.

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017
(in millions, except per share amounts, unaudited)

	As Originally Reported			Adjustments ⁽¹⁾			As Adjusted
Net Sales	$	1,818.1		$	(5.0	)	$	1,813.1
Cost of products sold, excluding intangible asset amortization		500.9			-			500.9
Intangible asset amortization		152.7			-			152.7
Research and development		91.2			-			91.2
Selling, general and administrative		694.5			(2.8	)		691.7
Goodwill impairment		32.7			-			32.7
Special items		132.7			-			132.7
Operating expenses		1,604.7			(2.8	)		1,601.9
Operating Profit		213.4			(2.2	)		211.2
Other expense, net		(4.5	)		2.2			(2.3	)
Interest income		0.6			-			0.6
Interest expense		(82.3	)		-			(82.3	)
Earnings before income taxes		127.2			-			127.2
Provision for income taxes		28.4			-			28.4
Net Earnings		98.8			-			98.8
Less: Net Loss attributable to noncontrolling interest		-			-			-
Net Earnings of Zimmer Biomet Holdings, Inc.	$	98.8		$	-		$	98.8

Earnings Per Common Share
Basic	$	0.49		$	-		$	0.49
Diluted	$	0.48		$	-		$	0.48
Weighted Average Common Shares Outstanding
Basic		202.3			-			202.3
Diluted		204.0			-			204.0


⁽¹⁾ New accounting standard adjustments include a reclassication of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09 and a reclassification of certain components of pension expense from Selling, general and administrative expenses to Other expense, net due to the adoption of ASU 2017-07.

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2017
(in millions, except per share amounts, unaudited)

	As Originally Reported			Adjustments ⁽¹⁾			As Adjusted
Net Sales	$	2,074.3		$	(6.0	)	$	2,068.3
Cost of products sold, excluding intangible asset amortization		591.4			-			591.4
Intangible asset amortization		151.5			-			151.5
Research and development		95.0			-			95.0
Selling, general and administrative		770.6			(3.8	)		766.8
Goodwill impairment		272.0			-			272.0
Special items		231.7			-			231.7
Operating expenses		2,112.2			(3.8	)		2,108.4
Operating Profit		(37.9	)		(2.2	)		(40.1	)
Other expense, net		(7.1	)		2.2			(4.9	)
Interest income		0.8			-			0.8
Interest expense		(80.0	)		-			(80.0	)
Earnings before income taxes		(124.2	)		-			(124.2	)
Provision for income taxes		(1,355.4	)		-			(1,355.4	)
Net Earnings		1,231.2			-			1,231.2
Less: Net Loss attributable to noncontrolling interest		(0.2	)		-			(0.2	)
Net Earnings of Zimmer Biomet Holdings, Inc.	$	1,231.4		$	-		$	1,231.4

Earnings Per Common Share
Basic	$	6.08		$	-		$	6.08
Diluted	$	6.03		$	-		$	6.03
Weighted Average Common Shares Outstanding
Basic		202.5			-			202.5
Diluted		204.1			-			204.1


⁽¹⁾ New accounting standard adjustments include a reclassication of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09 and a reclassification of certain components of pension expense from Selling, general and administrative expenses to Other expense, net due to the adoption of ASU 2017-07.

ZIMMER BIOMET HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2017
(in millions, except per share amounts, unaudited)

	As Originally Reported			Adjustments ⁽¹⁾			As Adjusted
Net Sales	$	7,824.1		$	(20.8	)	$	7,803.3
Cost of products sold, excluding intangible asset amortization		2,132.9			-			2,132.9
Intangible asset amortization		603.9			-			603.9
Research and development		367.4			-			367.4
Selling, general and administrative		2,973.9			(11.9	)		2,962.0
Goodwill impairment		304.7			-			304.7
Special items		633.1			-			633.1
Operating expenses		7,015.9			(11.9	)		7,004.0
Operating Profit		808.2			(8.9	)		799.3
Other expense, net		(18.3	)		8.9			(9.4	)
Interest income		2.2			-			2.2
Interest expense		(327.5	)		-			(327.5	)
Earnings before income taxes		464.6			-			464.6
Provision for income taxes		(1,348.8	)		-			(1,348.8	)
Net Earnings		1,813.4			-			1,813.4
Less: Net Loss attributable to noncontrolling interest		(0.4	)		-			(0.4	)
Net Earnings of Zimmer Biomet Holdings, Inc.	$	1,813.8		$	-		$	1,813.8

Earnings Per Common Share
Basic	$	8.98		$	-		$	8.98
Diluted	$	8.90		$	-		$	8.90
Weighted Average Common Shares Outstanding
Basic		201.9			-			201.9
Diluted		203.7			-			203.7



⁽¹⁾ New accounting standard adjustments include a reclassication of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09 and a reclassification of certain components of pension expense from Selling, general and administrative expenses to Other expense, net due to the adoption of ASU 2017-07.

ZIMMER BIOMET HOLDINGS, INC.
NET SALES
FOR THE THREE MONTHS ENDED MARCH 31, 2016
(in millions, unaudited)

	As Originally Reported		Adjustments ⁽¹⁾			As Adjusted
Geographic Results
Americas	$	1,177.2	$	(3.2	)	$	1,174.0
EMEA		456.3		-			456.3
Asia Pacific		270.5		-			270.5
Total	$	1,904.0	$	(3.2	)	$	1,900.8

Product Categories
Knees
Americas	$	430.2	$	(1.1	)	$	429.1
EMEA		174.0		-			174.0
Asia Pacific		99.9		-			99.9
Total		704.1		(1.1	)		703.0
Hips
Americas	$	245.2	$	(0.7	)	$	244.5
EMEA		136.7		-			136.7
Asia Pacific		85.1		-			85.1
Total		467.0		(0.7	)		466.3
S.E.T.⁽²⁾		401.0		(1.1	)		399.9
Dental		108.6		-			108.6
Spine & CMF		141.2		-			141.2
Other		82.1		(0.3	)		81.8
Total	$	1,904.0	$	(3.2	)	$	1,900.8


⁽¹⁾New accounting standard adjustments include a reclassification of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09.
⁽²⁾Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

ZIMMER BIOMET HOLDINGS, INC.
NET SALES
FOR THE THREE MONTHS ENDED JUNE 30, 2016
(in millions, unaudited)

	As Originally Reported		Adjustments ⁽¹⁾			As Adjusted
Geographic Results
Americas	$	1,181.0	$	(3.9	)	$	1,177.1
EMEA		460.9		-			460.9
Asia Pacific		292.1		-			292.1
Total	$	1,934.0	$	(3.9	)	$	1,930.1

Product Categories
Knees
Americas	$	417.9	$	(1.1	)	$	416.8
EMEA		168.8		-			168.8
Asia Pacific		111.1		-			111.1
Total		697.8		(1.1	)		696.7
Hips
Americas	$	247.9	$	(0.6	)	$	247.3
EMEA		138.7		-			138.7
Asia Pacific		89.8		-			89.8
Total		476.4		(0.6	)		475.8
S.E.T.⁽²⁾		412.2		(1.4	)		410.8
Dental		118.0		-			118.0
Spine & CMF		145.8		(0.4	)		145.4
Other		83.8		(0.4	)		83.4
Total	$	1,934.0	$	(3.9	)	$	1,930.1


⁽¹⁾New accounting standard adjustments include a reclassification of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09.
⁽²⁾Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

ZIMMER BIOMET HOLDINGS, INC.
NET SALES
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016
(in millions, unaudited)

	As Originally Reported		Adjustments ⁽¹⁾			As Adjusted
Geographic Results
Americas	$	1,175.9	$	(3.6	)	$	1,172.3
EMEA		368.8		-			368.8
Asia Pacific		288.1		-			288.1
Total	$	1,832.8	$	(3.6	)	$	1,829.2

Product Categories
Knees
Americas	$	398.2	$	(1.2	)	$	397.0
EMEA		130.3		-			130.3
Asia Pacific		103.9		-			103.9
Total		632.4		(1.2	)		631.2
Hips
Americas	$	238.3	$	(0.7	)	$	237.6
EMEA		112.1		-			112.1
Asia Pacific		89.3		-			89.3
Total		439.7		(0.7	)		439.0
S.E.T.⁽²⁾		401.8		(1.3	)		400.5
Dental		95.9		-			95.9
Spine & CMF		183.7		(0.1	)		183.6
Other		79.3		(0.3	)		79.0
Total	$	1,832.8	$	(3.6	)	$	1,829.2


⁽¹⁾New accounting standard adjustments include a reclassification of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09.
⁽²⁾Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

ZIMMER BIOMET HOLDINGS, INC.
NET SALES
FOR THE THREE MONTHS ENDED DECEMBER 31, 2016
(in millions, unaudited)

	As Originally Reported		Adjustments ⁽¹⁾			As Adjusted
Geographic Results
Americas	$	1,268.1	$	(4.8	)	$	1,263.3
EMEA		444.4		-			444.4
Asia Pacific		300.6		-			300.6
Total	$	2,013.1	$	(4.8	)	$	2,008.3

Product Categories
Knees
Americas	$	445.1	$	(1.5	)	$	443.6
EMEA		165.0		-			165.0
Asia Pacific		111.7		-			111.7
Total		721.8		(1.5	)		720.3
Hips
Americas	$	253.3	$	(0.6	)	$	252.7
EMEA		134.6		-			134.6
Asia Pacific		93.4		-			93.4
Total		481.3		(0.6	)		480.7
S.E.T.⁽²⁾		429.4		(1.5	)		427.9
Dental		105.4		-			105.4
Spine & CMF		191.3		(0.8	)		190.5
Other		83.9		(0.4	)		83.5
Total	$	2,013.1	$	(4.8	)	$	2,008.3


⁽¹⁾New accounting standard adjustments include a reclassification of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09.
⁽²⁾Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

ZIMMER BIOMET HOLDINGS, INC.
NET SALES
FOR THE YEAR ENDED DECEMBER 31, 2016
(in millions, unaudited)

	As Originally Reported		Adjustments ⁽¹⁾			As Adjusted
Geographic Results
Americas	$	4,802.2	$	(15.5	)	$	4,786.7
EMEA		1,730.4		-			1,730.4
Asia Pacific		1,151.3		-			1,151.3
Total	$	7,683.9	$	(15.5	)	$	7,668.4

Product Categories
Knees
Americas	$	1,691.4	$	(4.9	)	$	1,686.5
EMEA		638.1		-			638.1
Asia Pacific		426.6		-			426.6
Total		2,756.1		(4.9	)		2,751.2
Hips
Americas	$	984.7	$	(2.6	)	$	982.1
EMEA		522.1		-			522.1
Asia Pacific		357.6		-			357.6
Total		1,864.4		(2.6	)		1,861.8
S.E.T.⁽²⁾		1,644.4		(5.3	)		1,639.1
Dental		427.9		-			427.9
Spine & CMF		662.0		(1.3	)		660.7
Other		329.1		(1.4	)		327.7
Total	$	7,683.9	$	(15.5	)	$	7,668.4


⁽¹⁾New accounting standard adjustments include a reclassification of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09.
⁽²⁾Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

ZIMMER BIOMET HOLDINGS, INC.
NET SALES
FOR THE THREE MONTHS ENDED MARCH 31, 2017
(in millions, unaudited)

	As Originally Reported		Adjustments ⁽¹⁾			As Adjusted
Geographic Results
Americas	$	1,234.8	$	(4.9	)	$	1,229.9
EMEA		453.2		-			453.2
Asia Pacific		289.3		-			289.3
Total	$	1,977.3	$	(4.9	)	$	1,972.4

Product Categories
Knees
Americas	$	429.9	$	(1.9	)	$	428.0
EMEA		167.9		-			167.9
Asia Pacific		104.9		-			104.9
Total		702.7		(1.9	)		700.8
Hips
Americas	$	245.5	$	(1.0	)	$	244.5
EMEA		136.2		-			136.2
Asia Pacific		93.1		-			93.1
Total		474.8		(1.0	)		473.8
S.E.T.⁽²⁾		425.1		(1.6	)		423.5
Dental		107.8		-			107.8
Spine & CMF		186.3		-			186.3
Other		80.6		(0.4	)		80.2
Total	$	1,977.3	$	(4.9	)	$	1,972.4


⁽¹⁾New accounting standard adjustments include a reclassification of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09.
⁽²⁾Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

ZIMMER BIOMET HOLDINGS, INC.
NET SALES
FOR THE THREE MONTHS ENDED JUNE 30, 2017
(in millions, unaudited)

	As Originally Reported		Adjustments ⁽¹⁾			As Adjusted
Geographic Results
Americas	$	1,208.8	$	(4.9	)	$	1,203.9
EMEA		438.2		-			438.2
Asia Pacific		307.4		-			307.4
Total	$	1,954.4	$	(4.9	)	$	1,949.5

Product Categories
Knees
Americas	$	406.8	$	(1.4	)	$	405.4
EMEA		159.8		-			159.8
Asia Pacific		114.8		-			114.8
Total		681.4		(1.4	)		680.0
Hips
Americas	$	244.2	$	(0.8	)	$	243.4
EMEA		130.7		-			130.7
Asia Pacific		93.9		-			93.9
Total		468.8		(0.8	)		468.0
S.E.T.⁽²⁾		422.8		(1.7	)		421.1
Dental		110.4		-			110.4
Spine & CMF		194.0		(0.7	)		193.3
Other		77.0		(0.3	)		76.7
Total	$	1,954.4	$	(4.9	)	$	1,949.5


⁽¹⁾New accounting standard adjustments include a reclassification of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09.
⁽²⁾Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

ZIMMER BIOMET HOLDINGS, INC.
NET SALES
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017
(in millions, unaudited)

	As Originally Reported		Adjustments ⁽¹⁾			As Adjusted
Geographic Results
Americas	$	1,142.0	$	(5.0	)	$	1,137.0
EMEA		381.1		-			381.1
Asia Pacific		295.0		-			295.0
Total	$	1,818.1	$	(5.0	)	$	1,813.1

Product Categories
Knees
Americas	$	383.2	$	(1.7	)	$	381.5
EMEA		135.1		-			135.1
Asia Pacific		106.3		-			106.3
Total		624.6		(1.7	)		622.9
Hips
Americas	$	227.4	$	(0.8	)	$	226.6
EMEA		115.1		-			115.1
Asia Pacific		91.1		-			91.1
Total		433.6		(0.8	)		432.8
S.E.T.⁽²⁾		406.6		(1.8	)		404.8
Dental		92.9		-			92.9
Spine & CMF		184.9		(0.4	)		184.5
Other		75.5		(0.3	)		75.2
Total	$	1,818.1	$	(5.0	)	$	1,813.1


⁽¹⁾New accounting standard adjustments include a reclassification of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09.
⁽²⁾Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

ZIMMER BIOMET HOLDINGS, INC.
NET SALES
FOR THE THREE MONTHS ENDED DECEMBER 31, 2017
(in millions, unaudited)

	As Originally Reported		Adjustments ⁽¹⁾			As Adjusted
Geographic Results
Americas	$	1,280.0	$	(6.0	)	$	1,274.0
EMEA		472.7		-			472.7
Asia Pacific		321.6		-			321.6
Total	$	2,074.3	$	(6.0	)	$	2,068.3

Product Categories
Knees
Americas	$	443.4	$	(1.8	)	$	441.6
EMEA		181.6		-			181.6
Asia Pacific		107.1		-			107.1
Total		732.1		(1.8	)		730.3
Hips
Americas	$	255.4	$	(1.0	)	$	254.4
EMEA		136.4		-			136.4
Asia Pacific		106.4		-			106.4
Total		498.2		(1.0	)		497.2
S.E.T.⁽²⁾		454.6		(2.2	)		452.4
Dental		107.5		-			107.5
Spine & CMF		194.3		(0.5	)		193.8
Other		87.6		(0.5	)		87.1
Total	$	2,074.3	$	(6.0	)	$	2,068.3


⁽¹⁾New accounting standard adjustments include a reclassification of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09.
⁽²⁾Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

ZIMMER BIOMET HOLDINGS, INC.
NET SALES
FOR THE YEAR ENDED DECEMBER 31, 2017
(in millions, unaudited)

	As Originally Reported		Adjustments ⁽¹⁾			As Adjusted
Geographic Results
Americas	$	4,865.6	$	(20.8	)	$	4,844.8
EMEA		1,745.2		-			1,745.2
Asia Pacific		1,213.3		-			1,213.3
Total	$	7,824.1	$	(20.8	)	$	7,803.3

Product Categories
Knees
Americas	$	1,663.3	$	(6.8	)	$	1,656.5
EMEA		644.4		-			644.4
Asia Pacific		433.1		-			433.1
Total		2,740.8		(6.8	)		2,734.0
Hips
Americas	$	972.5	$	(3.6	)	$	968.9
EMEA		518.4		-			518.4
Asia Pacific		384.5		-			384.5
Total		1,875.4		(3.6	)		1,871.8
S.E.T.⁽²⁾		1,709.1		(7.3	)		1,701.8
Dental		418.6		-			418.6
Spine & CMF		759.5		(1.6	)		757.9
Other		320.7		(1.5	)		319.2
Total	$	7,824.1	$	(20.8	)	$	7,803.3


⁽¹⁾New accounting standard adjustments include a reclassification of certain costs from Selling, general and administrative expenses to Net Sales due to the adoption of ASU 2014-09.
⁽²⁾ Surgical, Sports Medicine, Foot and Ankle, Extremities and Trauma

ZIMMER BIOMET HOLDINGS, INC.
Reconciliation of Revised Gross Profit & Margin to Adjusted Gross Profit & Margin
For the Quarterly and Full Year Periods in Calendar Year Ended December 31, 2017
(in millions, unaudited)

	Three Months Ended			Three Months Ended			Three Months Ended			Three Months Ended			Year Ended
	March 31, 2017			June 30, 2017			September 30, 2017			December 31, 2017			December 31, 2017
Revised⁽¹⁾ Net Sales	$	1,972.4		$	1,949.5		$	1,813.1		$	2,068.3		$	7,803.3
Cost of products sold, excluding intangible asset amortization		512.9			527.7			500.9			591.4			2,132.9
Intangible asset amortization		152.0			147.7			152.7			151.5			603.9
Revised⁽¹⁾ Gross profit	$	1,307.5		$	1,274.1		$	1,159.5		$	1,325.4		$	5,066.5
Inventory step-up and other inventory and manufacturing related charges		23.2			24.9			10.4			26.1			84.6
Intangible asset amortization		152.0			147.7			152.7			151.5			603.9
Adjusted gross profit	$	1,482.7		$	1,446.7		$	1,322.6		$	1,503.0		$	5,755.0

Revised⁽¹⁾ Gross margin		66.3	%		65.4	%		64.0	%		64.1	%		64.9	%
Inventory step-up and other inventory and manufacturing related charges		1.2			1.2			0.5			1.3			1.2
Intangible asset amortization		7.7			7.6			8.4			7.3			7.7
Adjusted gross margin		75.2	%		74.2	%		72.9	%		72.7	%		73.8	%

⁽¹⁾ Revisions resulting from adoption of ASU 2014-09

ZIMMER BIOMET HOLDINGS, INC.
Reconciliation of Revised Gross Profit & Margin to Adjusted Gross Profit & Margin
For the Quarterly and Full Year Periods in Calendar Year Ended December 31, 2016
(in millions, unaudited)

	Three Months Ended			Three Months Ended			Three Months Ended			Three Months Ended			Year Ended
	March 31, 2016			June 30, 2016			September 30, 2016			December 31, 2016			December 31, 2016
Revised⁽¹⁾ Net Sales	$	1,900.8		$	1,930.1		$	1,829.2		$	2,008.3		$	7,668.4
Cost of products sold, excluding intangible asset amortization		640.6			640.1			479.3			621.8			2,381.8
Intangible asset amortization		126.6			133.8			164.3			141.2			565.9
Revised⁽¹⁾ Gross profit	$	1,133.6		$	1,156.2		$	1,185.6		$	1,245.3		$	4,720.7
Inventory step-up and other inventory and manufacturing related charges		178.3			156.6			22.8			111.4			469.1
Intangible asset amortization		126.6			133.8			164.3			141.2			565.9
Adjusted gross profit	$	1,438.5		$	1,446.6		$	1,372.7		$	1,497.9		$	5,755.7

Revised⁽¹⁾ Gross margin		59.6	%		59.9	%		64.8	%		62.0	%		61.6	%
Inventory step-up and other inventory and manufacturing related charges		9.4			8.1			1.2			5.6			6.1
Intangible asset amortization		6.7			6.9			9.0			7.0			7.4
Adjusted gross margin		75.7	%		74.9	%		75.0	%		74.6	%		75.1	%

⁽¹⁾ Revisions resulting from adoption of ASU 2014-09

ZIMMER BIOMET HOLDINGS, INC.
Reconciliation of Revised Operating Profit (Loss) & Margin to Adjusted Operating Profit & Margin
For the Quarterly and Full Year Periods in Calendar Year Ended December 31, 2017
(in millions, unaudited)

	Three Months Ended			Three Months Ended			Three Months Ended			Three Months Ended			Year Ended
	March 31, 2017			June 30, 2017			September 30, 2017			December 31, 2017			December 31, 2017
Revised⁽¹⁾ Operating profit (loss)	$	348.1		$	280.1		$	211.2		$	(40.1	)	$	799.3
Inventory step-up and other inventory and manufacturing related charges		23.2			24.9			10.4			26.1			84.6
Intangible asset amortization		152.0			147.7			152.7			151.5			603.9
Goodwill impairment		-			-			32.7			272.0			304.7
Special items		110.1			158.6			132.7			231.7			633.1
Adjusted operating profit	$	633.4		$	611.3		$	539.7		$	641.2		$	2,425.6

Revised⁽¹⁾ Operating profit (loss) margin		17.7	%		14.4	%		11.7	%		(1.9	)%		10.2	%
Inventory step-up and other inventory and manufacturing related charges		1.2			1.2			0.5			1.3			1.2
Intangible asset amortization		7.7			7.6			8.4			7.3			7.7
Goodwill impairment		-			-			1.8			13.2			3.9
Special items		5.5			8.2			7.4			11.1			8.1
Adjusted operating profit margin		32.1	%		31.4	%		29.8	%		31.0	%		31.1	%

⁽¹⁾ Revisions resulting from adoption of ASU 2014-09 and ASU 2017-07

ZIMMER BIOMET HOLDINGS, INC.
Reconciliation of Operating Profit & Margin to Adjusted Operating Profit & Margin
For the Quarterly and Full Year Periods in Calendar Year Ended December 31, 2016
(in millions, unaudited)

	Three Months Ended			Three Months Ended			Three Months Ended			Three Months Ended			Year Ended
	March 31, 2016			June 30, 2016			September 30, 2016			December 31, 2016			December 31, 2016
Revised⁽¹⁾ Operating profit	$	244.3		$	200.4		$	194.3		$	182.1		$	821.1
Inventory step-up and other inventory and manufacturing related charges		178.3			156.6			22.8			111.4			469.1
Intangible asset amortization		126.6			133.8			164.3			141.2			565.9
Special items		88.7			137.9			170.4			214.8			611.8
Adjusted operating profit	$	637.9		$	628.7		$	551.8		$	649.5		$	2,467.9

Revised⁽¹⁾ Operating profit margin		12.9	%		10.4	%		10.6	%		9.1	%		10.7	%
Inventory step-up and other inventory and manufacturing related charges		9.4			8.1			1.2			5.6			6.1
Intangible asset amortization		6.7			6.9			9.0			7.0			7.4
Special items		4.6			7.2			9.4			10.6			8.0
Adjusted operating profit margin		33.6	%		32.6	%		30.2	%		32.3	%		32.2	%

⁽¹⁾ Revisions resulting from adoption of ASU 2014-09 and ASU 2017-07

ZIMMER BIOMET HOLDINGS, INC. - FORM 8-K - EX-99.1 - April 6, 2018

Attached files

ZIMMER BIOMET HOLDINGS, INC. Reports