Summary of ZIMMER HOLDINGS INC

Results of Operations and Financial Condition, Financial Statements and Exhib

Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On January 29, 2009, Zimmer Holdings, Inc. (the "Registrant") reported its results of operations for the quarter and year ended December 31, 2008. The Registrant's earnings release is attached as Exhibit 99.1 and the information set forth therein is incorporated herein by reference and constitutes a part of this report.
The earnings release attached as Exhibit 99.1 includes two types of non-GAAP financial measures that differ from financial measures calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP financial measures may not be comparable to similar measures reported by other companies and should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP. The first type of non-GAAP financial measure included in the press release consists of sales information reported on a constant currency basis which has been calculated by translating actual current and prior-period sales at the same predetermined exchange rate. The translated results are then used to determine year-over-year percentage increases or decreases that exclude the effect of changes in foreign currency exchange rates.
The second type of non-GAAP financial measure included in the press release consists of operating performance measures that have been adjusted to exclude certain items. The Registrant has presented adjusted net earnings and adjusted diluted EPS for the fourth quarter and full year 2008 and projected adjusted diluted EPS for the full year 2009 to exclude the effects of inventory step-up and acquisition, integration and other related expenses, including in-process research and development ("IPR&D") charges associated with the recent acquisition of Abbott Spine, net of tax. In addition, adjusted net earnings and adjusted diluted EPS for the fourth quarter and full year 2008 exclude a provision for known and anticipated claims relating to the previously announced voluntary suspension of marketing and distribution of the Durom® Acetabular Component in the U.S., net of tax. Adjusted net earnings and adjusted diluted EPS for the full year 2008 also exclude an estimated current tax benefit recorded in the third quarter of 2008 related to the deductibility of the $169.5 million civil settlement amount paid in September 2007 in connection with the settlement of a federal investigation.
Adjusted net earnings and adjusted diluted EPS for the 2007 periods presented in the press release exclude inventory step-up and acquisition, integration and other related expenses, net of tax. Adjusted net earnings and adjusted diluted EPS for the full year 2007 also exclude the payment of the $169.5 million civil settlement amount referred to above.
The items identified above are typically highly variable and of a size that could have a substantial impact on the Registrant's reported operations for a period. Management considers the provision related to the Durom Acetabular Component a non-recurring item that, as explained in the press release, is qualitatively different from the Registrant's routine product liability claims.
Management uses this non-GAAP information internally to evaluate the performance of the business and believes that it provides useful information to investors by offering the ability to make more meaningful period-to-period comparisons of the Registrant's on-going operating results, the ability to better identify operating trends that may otherwise be masked or distorted

by these types of items and to perform related trend analysis, and a higher degree of transparency of certain expenses.
All of the non-GAAP financial measures are reconciled to the most directly comparable GAAP financial measure in the press release.
The Registrant is furnishing the information contained in this report, including the Exhibit, pursuant to Item 2.02 of Form 8-K promulgated by the Securities and Exchange Commission (the "SEC"). This information shall not be deemed to be "filed" with the SEC or incorporated by reference into any other filing with the SEC. By filing this report on Form 8-K and furnishing this information, the Registrant makes no admission as to the materiality of any information in this report, including the Exhibit.