Zimmer Biomet Holdings (ZBH) 10-K risk factor changes: FY2021 vs FY2020

The COVID-19 pandemic has adversely impacted, and continues to pose risks to, our business, results of operations and financial condition, the nature and extent of which are highly uncertain and [added: remain] unpredictable.

| | • | lower revenues, profits and cash flows compared to historic [removed: trends, including a net loss recognized in 2020 and negative operating cash flows in the second quarter of 2020;] [added: trends;] |

| | • | goodwill impairment charges; [removed: and] |

| | • | delays in certain strategic projects and investments, including our restructuring plans, which will delay or may eliminate the effectiveness of these strategic [removed: initiatives.] [added: initiatives;] |

[removed: Prolonged disruptions that cause deferral] [added: Deferral] of elective surgical procedures [added: has caused us to experience certain of the following, and we] may [removed: result in] [added: experience other of] the [removed: following] [added: following,] among other potential negative outcomes:

| | • | excess inventory we cannot [removed: sell, which would result in increased inventory charges;] [added: sell;] |

| | • | [removed: failing] [added: failure] to satisfy the covenants in our credit facilities, which may cause any outstanding amounts to be payable immediately and could affect our access to capital to fund our business; and |

Our success largely depends on [removed: key personnel,] [added: the strength of our talent,] including our senior management, and [removed: having adequate] [added: ensuring we have meaningful] succession plans in place.

Our future performance depends, in large part, on the continued [added: skills, experiences, competencies and] services of our senior management and other key [removed: personnel,] [added: talent,] including our ability to attract, [removed: retain] [added: retain, develop] and motivate key [removed: personnel.][added: talent.]

Competition for [removed: key personnel] [added: talent] in the various [removed: localities] [added: geographies] and business segments in which we operate is [removed: intense.][added: significant.]

Our ability to attract and retain key [removed: personnel,] [added: talent,] in particular senior management, will be dependent on a number of factors, including prevailing market conditions and [added: our ability to offer competitive] compensation [removed: packages offered by companies competing for the same talent.][added: packages.]

The loss of the services of any of our senior management or other key [removed: personnel,] [added: talent,] or our inability to attract highly qualified senior management and other key [removed: personnel,] [added: talent,] could harm our business.

Failure to ensure effective transfer of knowledge and [removed: smooth] [added: orderly] transitions involving key employees could hinder our strategic planning and execution.

The [removed: proposed spin-off] [added: planned spinoff] of our Spine and Dental businesses may not be completed on the terms or timeline currently contemplated, if at all, and may not achieve the intended results.

[removed: On February 5, 2021,] [added: As previously announced,] we [removed: announced our intention to pursue a] plan to spin off our Spine and Dental businesses to form [added: ZimVie Inc.,] a new and independent, publicly traded company [removed: (“NewCo”)] [added: (“ZimVie”)] through a tax-free distribution to our stockholders of publicly traded stock in [removed: NewCo.][added: ZimVie.]

Therefore, we cannot provide assurance that we will be able to complete the [removed: spin-off] [added: spinoff] on the terms or on the timeline that we announced, or at all.

The [removed: spin-off] [added: spinoff] will also require modifications to our systems and processes used to operate our business.

We may experience delays, increased costs and other difficulties related to these modifications [added: during or following the spinoff,] which could adversely affect our business, financial condition and results of operations.

Following the [removed: spin-off,] [added: spinoff,] we will be a smaller, less diversified company with a narrower business focus and may be more vulnerable to changing market conditions, which could adversely affect our operating results.

We may also experience increased difficulties in attracting, retaining and motivating employees during the pendency of the [removed: spin-off] [added: spinoff] and following its completion, which could harm our business.

Further, if the [removed: spin-off] [added: spinoff] is completed, the anticipated benefits and synergies of the transaction, strategic and competitive advantages of each company, and future growth and other opportunities for each company may not be realized within the expected time periods or at all.

Failure to implement the [removed: spin-off] [added: spinoff] effectively could also result in a lower value to our company and our stockholders.

We [added: obtained an Internal Revenue Service (“IRS”) ruling, and we] intend to obtain an opinion [removed: and an IRS ruling] as to the tax-free nature of the [removed: spin-off] [added: spinoff] under the U.S. Internal Revenue Code of 1986, as amended.

The [removed: opinion and] [added: IRS] ruling [added: is, and the opinion] will [removed: be] [added: be,] based, among other things, on various factual assumptions and representations we will make.

If the [removed: spin-off] [added: spinoff] does not qualify for tax-free treatment for U.S. federal income tax purposes, the resulting tax liability to [removed: us] [added: us, to our stockholders] and to [removed: NewCo] [added: ZimVie] stockholders could be substantial.

Interruption of [removed: our] manufacturing operations could adversely affect our business, financial condition and results of operations.

We [added: and our third-party manufacturers] have manufacturing sites all over the world.

In some instances, however, the manufacturing of certain of our product lines is concentrated in one or more [removed: of our] plants.

Damage to one or more [removed: of our] facilities from weather or natural disaster-related events, vulnerabilities in [removed: our] technology, cyber-attacks against our information systems or the information systems of our business partners (such as ransomware attacks), or issues in [removed: our] manufacturing arising from failure to follow specific internal protocols and procedures, compliance concerns relating to the QSR and Good Manufacturing Practice requirements, equipment breakdown or malfunction, reductions in operations and/or worker absences due to the COVID-19 pandemic or other health [removed: epidemics,] [added: epidemics (or local, state,] or [added: national reactions to such epidemics), or] other factors could adversely affect [removed: our] [added: the] ability to manufacture our products.

In certain cases, we may not be able to establish additional or replacement suppliers for such materials or components or outsourced activities in a timely or cost effective manner, largely as a result of FDA [added: and other worldwide] regulations that require validation of materials and components prior to their use in our products and the complex nature of our and many of our suppliers' manufacturing [removed: processes.][added: processes and the need for clearance or approval of significant changes by worldwide regulatory bodies prior to implementation.]

We have a complex supply chain and we may not be able to sufficiently verify the origins of the minerals and metals used in our products through our [added: due diligence procedures.]

[removed: We] [added: We] are increasingly dependent on sophisticated information technology and if we fail to effectively maintain or protect our information systems or data, including from data breaches, our business could be adversely [removed: affected.][added: affected.]

Any significant breakdown, intrusion, breach, interruption, corruption or destruction of these systems could have a material adverse effect on our business and [removed: reputation.][added: reputation and could materially adversely affect our results of operations and financial condition.]

[removed: Our] [added: Our] success depends on our ability to effectively develop and market our products against those of our [removed: competitors.][added: competitors.]

Our present or future products could be rendered obsolete or uneconomical by technological advances by one or more of our present or future competitors or by other therapies, [removed: including biological therapies.]

If we fail to retain the [added: employees and] independent agents and distributors upon whom we rely heavily to market our products, customers may not buy our products and our revenue and profitability may decline.

Our marketing success in the U.S. and abroad depends significantly upon our [added: employees’,] agents’ and distributors’ sales and service expertise in the marketplace.

If key participants in government healthcare systems reduce the reimbursement levels for our products, including through political changes or transitions, our [removed: sales and] [added: business, financial condition,] results of operations [added: and cash flows] may be adversely affected.

[removed: Many] [added: In addition, many] customers for our products have formed group purchasing organizations in an effort to contain costs.

If we are not one of the providers selected by a group purchasing organization, affiliated hospitals and other members may be less likely to purchase our products, and, if the group purchasing organization has negotiated a strict compliance contract for another manufacturer’s products, we may be precluded from making [removed: sales to members of the group purchasing organization for the duration of the contractual arrangement.]

We continue to experience a decline in elective surgical procedures globally due to the COVID-19 pandemic.

In the third and fourth quarters of 2021, the highly transmissible Delta and Omicron variants resulted in further deferrals of elective surgical procedures, and we believe that staffing shortages at hospitals also contributed to the deferral of such procedures.

We expect these declines to continue for the duration of the pandemic, and they may be further impacted by COVID-19 variants and resurgences.

The COVID-19 global pandemic has had, and we expect it to continue to have, an adverse impact on our financial condition, results of operations and cash flows.

Our net sales have not returned to pre-pandemic levels.

It is not certain when our financial condition, results of operations, or cash flows will return to pre-pandemic levels.

In December 2021, our management also initiated a global restructuring program (the “2021 Restructuring Plan”) to reorganize our operations in preparation for the planned spinoff of ZimVie with an objective of reducing costs.

Unanticipated developments could delay, prevent or otherwise adversely affect the planned spinoff.

We expect the completion of the spinoff to continue to require significant expenses and management time and effort.

We will have continuing obligations to ZimVie after the completion of the spinoff, which may cause us to incur additional costs.

The planned spinoff, and any subsequent divestiture of our retained interest in ZimVie, could result in substantial tax liability.

We have announced we intend to retain 19.7% of the outstanding shares of ZimVie common stock upon the spinoff and to divest these shares after the spinoff in a tax-efficient manner.

There can be no assurance that any such divestiture will occur, will occur at a time or times favorable to us, or will occur at prices or on terms favorable to us.

Additionally, there can be no assurance that any such divestiture achieves a desired or any favorable tax

treatment.

If the divesture does not achieve a favorable tax treatment, the resulting tax liability to us, to our stockholders, and to ZimVie stockholders could be substantial.

We have experienced such interruptions due to the COVID-19 pandemic, and we may experience such interruptions in the future.

including biological therapies.

For example, China has implemented a volume-based procurement process designed to decrease prices for medical devices and other products.

We are subject to cost containment measures in the United States and other countries, resulting in pricing pressures, which could have a material adverse effect on our business, results of operations, and cash flows.

Initiatives to limit the growth of general healthcare expenses and hospital costs are ongoing in the markets in which we do business.

These initiatives are sponsored by government agencies, legislative bodies and the private sector and include price regulation and competitive pricing.

For example, China has implemented a volume-based procurement process designed to decrease prices for certain medical devices and other products, which has in the past resulted in, and could in the future result in, reduced margins on covered devices and products, required renegotiation of distributor arrangements, and incurrence of inventory-related charges.

Pricing pressure has also increased due to continued consolidation among healthcare providers, trends toward managed care, the shift toward governments becoming the primary payors of healthcare expenses, reductions in reimbursement levels and government laws and regulations relating to reimbursement and pricing generally.

sales to members of the group purchasing organization for the duration of the contractual arrangement.

On March 5, 2021, the FCA publicly announced publication of all non-U.S. dollar denominated LIBO rate settings, as well as the 1-week and 2-month U.S. dollar denominated LIBO rate, will permanently cease as of December 31, 2021, and that publication of the overnight and 12-month U.S. dollar denominated LIBO rate settings will permanently cease after June 30, 2023.

In addition, the FCA announced that immediately after June 30, 2023, the 1-month, 3-month and 6-month U.S. dollar LIBO rates will cease to be provided or, subject to the FCA’s consideration of the case, may be provided on a synthetic basis and no longer be representative of the underlying market and economic reality that they are intended to measure and that representativeness will not be restored.

The dates announced by the FCA may change or other administrators of LIBO rates and/or regulators may take further action that could change or otherwise impact the availability and characteristics of LIBO rates, currencies and tenors.

The credit agreements governing our debt provide a mechanism for determining alternative rates of interest using customary hardwired rate replacement provisions which establish a waterfall approach for establishment of a replacement benchmark interest rate in the event that LIBO rates are unavailable, subject to spread adjustments to be determined with reference to the recommendations of relevant governmental bodies or, in certain circumstances, evolving or then-prevailing market conventions for determining or calculating such spread adjustment for U.S. dollar denominated syndicated credit facilities.

Any alternative, successor, or replacement rate may not be similar to, or produce the same value or economic equivalence of, the LIBO rate or have the same volume or liquidity as did the LIBO rate prior to its discontinuance or unavailability, which may increase our overall interest expense on unhedged variable rate indebtedness which is currently based on the LIBO rate.

Further, the use of an alternative base rate or a benchmark replacement rate as a basis for

The Build Back Better Act proposed an increase in the U.S. Global Intangible Low-Taxed Income (“GILTI”) foreign minimum tax rate from 10.5% to 15%, assessing the GILTI tax on a per country basis, reduction of the Foreign-Derived Intangible Income tax benefit, and disallowance of certain corporate interest expense.

Furthermore, the FDA strictly regulates the promotional claims that we may make about approved or cleared products.

If the FDA determines that we have marketed or promoted a product for off-label use—uses other than those indicated on the labeling cleared by the FDA—we could be subject to fines, injunctions or other penalties.

Similarly, the separation of states from participation in the EU, such as through the cessation of the UK’s membership in the EU (commonly known as “Brexit”) and the separation of the Swiss and EU medical product markets with the adoption of MDR (commonly referred to as “Swexit”), may result in further regulatory risk and complexity as the former EU member or participant state establishes separate laws and regulations governing medical products.

The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving as countries continue to adopt privacy and data security laws.

The issue of new standard contractual clauses (“SCCs”) governing cross-border data transfers between controllers and processors by the EU Commission, in conjunction with related requirements on

conducting data transfer impact assessments in respect of cross-border data transfers from the EU and the UK, may involve an increase in our costs of compliance as we transition to those SCCs and subject us to increased scrutiny by EU and UK regulators.

The PIPL, which took effect on November 1, 2021, shares many similarities with the EU GDPR.

This includes extraterritorial reach, strict restrictions on transfer of personal information (including in certain situations data localization or prior certification/authorization requirements), compliance obligations and sanctions for non-compliance (of up to 5% of annual turnover or 50 million Yuan).

The global spread of COVID‑19 has had, and we expect it to continue to have, an adverse impact on demand for our products, our sales, our operations, our supply chains and distribution systems, and our expenses, including as a result of preventive and precautionary measures that we, other businesses, and governments have taken and may continue to take.

Due to these impacts and measures, we have experienced and expect to continue to experience significant and unpredictable reductions in the demand for our products as healthcare customers divert medical resources and priorities towards the treatment of COVID-19.

During 2020, we experienced a significant decline in procedure volumes globally as healthcare systems diverted resources to meet the increasing demands of managing COVID-19, and that decline has continued.

Additionally, public health bodies around the globe have at times recommended delaying elective surgeries during the COVID-19 pandemic, and patients, surgeons and medical societies are evaluating the risks of elective surgeries in the presence of infectious diseases, which we expect will continue to negatively impact demand for our products and the number of procedures performed.

As a result of the COVID-19 outbreak, we have experienced significant business disruptions, including restrictions on our ability to travel and to distribute our products, temporary closures of, or limited operations at, certain of our facilities and the facilities of our suppliers and contract manufacturers, as well as reduction in access to our customers due to diverted resources and priorities and the business hours of hospitals as governments institute prolonged shelter-in-place and/or self-quarantine mandates.

The unprecedented measures to slow the spread of the virus taken by local governments and healthcare authorities globally, including the deferral of elective surgical procedures and social distancing measures, have had, and we expect them to continue to have, a significant adverse effect on our financial position, results of operations and cash flows.

These disruptions have resulted in the following among other unfavorable outcomes:

| --- | --- | --- |

| | • | bad debt charges as a result of being unable to collect on our accounts receivable; |

| | • | additional charges from operating our manufacturing facilities at less than normal capacity; |

If preventative and precautionary measures and/or the distribution of vaccines do not curb the spread of COVID-19, our financial position, results of operations and cash flows may continue to be adversely affected.

| | • | net losses and negative operating cash flows; |

| | • | our customers returning inventory to us, which would result in a reduction to our net sales; |

| | • | additional goodwill impairment charges; |

In addition, the COVID-19 pandemic has adversely affected, and we expect it to continue to adversely affect, the economies and financial markets of many countries, which may result in a period of regional, national, and global economic slowdown or regional, national, or global recessions that could further negatively affect demand for our products as hospitals curtail or delay spending and individuals experiencing unemployment and/or a loss of healthcare benefits cancel or delay elective procedures, and could also increase the risk of customer defaults or delays in payments.

Our customers may terminate or amend their agreements for the purchase of our products due to bankruptcy, lack of liquidity, lack of funding, operational failures or other reasons.

Due to the uncertain scope and duration of the pandemic and uncertain timing of global recovery and economic normalization, we are unable to estimate the impacts on our operations and financial results.

We are targeting completion of the spin-off in mid-2022.

Unanticipated developments could delay, prevent or otherwise adversely affect this proposed spin-off, including but not limited to disruptions in general market conditions or potential problems or delays in obtaining various regulatory, tax and works council approvals or clearances.

In addition, consummation of the proposed spin-off is subject to certain conditions, including, among others, final approval of our Board of Directors, the receipt of a favorable opinion and Internal Revenue Service (“IRS”) ruling with respect to the tax-free nature of the transaction, and the effectiveness of a Form 10 registration statement with the SEC.

We will incur significant expenses in connection with the spin-off.

In addition, completion of the proposed spin-off will require significant amounts of management’s time and effort which may divert management’s attention from other aspects of our business operations.

The proposed spin-off may result in disruptions to, and negatively impact our relationships with, our customers and other business partners.

Parties with which we do business may experience uncertainty associated with the spin-off, including with respect to current or future business relationships with us.

Our business relationships may be subject to disruption as

customers, vendors and others may attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than us.

These disruptions could adversely affect our business, including adversely affecting our ability to realize the anticipated benefits of the spin-off.

The spin-off could result in substantial tax liability.

due diligence procedures.

The ongoing cost-containment efforts of healthcare purchasing organizations may have a material adverse effect on our results of operations.

In response to concerns regarding the future of LIBOR, the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York convened the Alternative Reference Rates Committee (“ARRC”) to identify alternatives to LIBOR.

The ARRC has recommended a benchmark replacement waterfall to assist issuers in continued capital market entry while safeguarding against LIBOR’s discontinuation.

The initial steps in the ARRC’s recommended provision reference variations of the Secured Overnight Financing Rate (“SOFR”).

In November 2020, the IBA announced a proposal that the cessation date for the submission and publication of certain tenors of U.S. dollar denominated LIBOR (including one-, three-, six- and twelve-month LIBOR) be extended to June 30, 2023.

At this time, it is not possible to predict whether SOFR will attain market traction as a LIBOR replacement, and it remains uncertain if LIBOR in applicable tenors and applicable currencies will cease to exist after calendar year 2021, or whether additional reforms to LIBOR may be enacted, or whether alternative reference rates will gain market acceptance as a replacement for LIBOR.

Further, other central banks have convened working groups to determine replacements or reforms of other interest rate benchmarks, such as EURIBOR, and it is expected, although not known, that a transition away from the use of certain of these other interest rate benchmarks will occur over the course of the next few years and alternative reference rates (such as the euro short-term rate (€STR)) will be established or gain market acceptance.

Certain of our debt obligations that are based on LIBOR will mature before the end of 2021.

However, the revolving credit agreement that we entered into on November 1, 2019 (the “2019 Credit Agreement”) has an initial maturity date of November 1, 2024.

In anticipation of LIBOR’s phase out, the 2019 Credit Agreement provides for alternative base rates as well as a transition mechanism for selecting a benchmark replacement rate for LIBOR, with such benchmark replacement rate to be mutually agreed with the general administrative agent and our lenders.

There can be no assurance that we will be able to reach an agreement with our lenders on any such replacement benchmark before experiencing adverse effects due to changes in interest rates, if at all.

The following discussion, analysis and comparisons generally focus on the operating results for the years ended December 31, [removed: 2020] [added: 2021] and [removed: 2019.][added: 2020.]

Discussion, analysis and comparisons of the years ended December 31, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, [removed: 2019.][added: 2020.]

Our results [removed: have been significantly] [added: continue to be] impacted by the COVID-19 global pandemic.

[removed: 2020] [added: 2021] Financial Highlights

In [removed: 2020,] [added: 2021,] our net sales [removed: decreased] [added: increased] by [removed: 12.0] [added: 11.6] percent compared to [removed: 2019] [added: 2020 primarily] due to the [added: significant] deferral of elective surgical procedures [removed: from] [added: at] the [added: onset of the] COVID-19 [removed: pandemic.][added: pandemic in 2020.]

[removed: The] [added: In the second quarter of 2020, we also] temporarily suspended or limited production at certain manufacturing [removed: facilities resulted] [added: facilities, resulting] in [removed: higher costs] [added: additional expense recognized in cost] of products sold that [removed: relate] [added: related] to certain fixed overhead costs and hourly production worker labor expenses that are included in the cost of inventory when these facilities are operating at normal capacity.

We believe the COVID-19 [added: variant] surges [added: and continuing staffing shortages] that occurred late in [removed: 2020] [added: 2021] will continue to negatively impact our net sales in [removed: 2021.][added: 2022.]

[removed: RESULTS] [added: RESULTS] OF [removed: OPERATIONS][added: OPERATIONS]

We analyze sales by three geographies, the Americas, EMEA and Asia Pacific, and by the following product categories: Knees; Hips; S.E.T.; [removed: Dental,] Spine & [removed: CMFT;] [added: Dental;] and Other.

This sales analysis differs from our reportable operating segments, which are based upon our senior management organizational structure and how we allocate [removed: resources towards achieving operating profit goals.]

| | | [removed: 2019] [added: 2021] | | | | [removed: 2018] [added: 2020] | | | | % [removed: Inc/(Dec)] [added: Inc] | | | | Mix | | | | Price | | | | Exchange | | | |

| | | [removed: 2020] [added: 2021] | | | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] % [removed: (Dec)] [added: Inc/(Dec)] | | | | [removed: 2019] [added: 2020] vs. [removed: 2018] [added: 2019] % Inc/(Dec) | | | |

| Americas | | $ | [removed: 941.5] [added: 997.8] | | | $ | [removed: 1,016.3] [added: 941.5] | | | $ | [removed: 996.3] [added: 1,016.3] | | | | [removed: (7.4] [added: 6.0] | [removed: )] | % | | [removed: 2.0] [added: (7.4] | [added: )] | % |

| EMEA | | | [removed: 407.8] [added: 474.0] | | | | [removed: 499.8] [added: 407.8] | | | | [removed: 519.9] [added: 499.8] | | | | [removed: (18.4] [added: 16.2] | [removed: )] | | | [removed: (3.9] [added: (18.4] | ) | |

| Asia Pacific | | | [removed: 401.2] [added: 384.3] | | | | [removed: 415.4] [added: 401.2] | | | | [removed: 402.7] [added: 415.4] | | | | [removed: (3.4] [added: (4.2] | ) | | | [removed: 3.2] [added: (3.4] | [added: )] | |

| Total | | $ | [removed: 1,750.5] [added: 1,856.1] | | | $ | [removed: 1,931.5] [added: 1,750.5] | | | $ | [removed: 1,918.9] [added: 1,931.5] | | | | [removed: (9.4] [added: 6.0] | [removed: )] | | | [removed: 0.7] [added: (9.4] | [added: )] | |

Changes in volume and mix of product sales had a [removed: negative] [added: positive] effect of [removed: 10.0] [added: 12.1] percent on year-over-year sales during the year ended December 31, [removed: 2020.][added: 2021.]

Based upon country dynamics, volume changes varied by region in [removed: 2020.][added: 2021.]

In the Americas, [added: elective surgical procedures in] the U.S. [removed: volume trends] varied from state-to-state depending on local infection rates and preventative [removed: measures.][added: measures in 2020.]

Global selling prices had a negative effect of [removed: 2.4] [added: 1.8] percent on year-over-year sales during [removed: 2020.][added: 2021.]

In [removed: 2020,] [added: 2021,] changes in foreign currency exchange rates had a positive effect of [removed: 0.4] [added: 1.3] percent on year-over-year sales.

If foreign currency exchange rates remain at levels consistent with recent rates, we estimate they will have a [removed: less than 1] [added: negative impact of approximately 2.0] percent [removed: positive effect] on sales in [removed: 2021] [added: 2022] for the full year.

The following table presents estimated* [removed: 2020] [added: 2021] global market information (dollars in billions):

| Knees | | $ | [removed: 9] [added: 10] | | | Low-Single Digit | | | 1 | |

| S.E.T. | | | [removed: 24] [added: 25] | | | Mid-Single Digit | | [added: N/A] | [removed: 5] | |

| [removed: CMFT] [added: Dental] | | | [removed: 3] [added: 8] | | | Mid-Single Digit | | | [removed: 3] [added: 5] | |

| Spine | | | [removed: 11] [added: 12] | | | Low-Single Digit | | | 6 | |

| | | [removed: 2020] [added: 2021] | | | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] Inc/(Dec) | | | | [removed: 2019] [added: 2020] vs. [removed: 2018] [added: 2019] Inc/(Dec) | | | |

| Cost of products sold, excluding intangible asset amortization | | | [removed: 30.3] [added: 29.9] | | % | | [removed: 28.2] [added: 30.3] | | % | | [removed: 28.6] [added: 28.2] | | % | | [removed: 2.1] [added: (0.4] | [added: )] | % | | [removed: (0.4] [added: 2.1] | [removed: )] | % |

| Intangible asset amortization | | | [removed: 8.5] [added: 7.9] | | | | [removed: 7.3] [added: 8.5] | | | | [removed: 7.5] [added: 7.3] | | | | [removed: 1.2] [added: (0.6] | [added: )] | | | [removed: (0.2] [added: 1.2] | [removed: )] | |

| Research and development | | | [removed: 5.3] [added: 6.3] | | | | [removed: 5.6] [added: 5.3] | | | | [removed: 4.9] [added: 5.6] | | | | [removed: (0.3] [added: 1.0] | [removed: )] | | | [removed: 0.7] [added: (0.3] | [added: )] | |

| Selling, general and administrative | | | [removed: 45.2] [added: 42.4] | | | | [removed: 41.9] [added: 45.2] | | | | [removed: 42.6] [added: 41.9] | | | | [removed: 3.3] [added: (2.8] | [added: )] | | | [removed: (0.7] [added: 3.3] | [removed: )] | |

| Goodwill and intangible asset impairment | | | [removed: 9.2] [added: 0.2] | | | | [removed: 0.9] [added: 9.2] | | | | [removed: 12.3] [added: 0.9] | | | | [removed: 8.3] [added: (9.0] | [added: )] | | | [removed: (11.4] [added: 8.3] | [removed: )] | |

| Restructuring and other cost reduction initiatives | | | [removed: 1.7] [added: 1.6] | | | | [removed: 0.6] [added: 1.7] | | | | [removed: 0.4] [added: 0.6] | | | | [removed: 1.1] [added: (0.1] | [added: )] | | | [removed: 0.2] [added: 1.1] | | |

| Quality remediation | | | 0.7 | | | | [removed: 1.0] [added: 0.7] | | | | [removed: 1.9] [added: 1.0] | | | | [removed: (0.3] [added: \-] | [removed: )] | | | [removed: (0.9] [added: (0.3] | ) | |

| Acquisition, [removed: integration] [added: integration, divestiture] and related | | | [removed: 0.3] [added: 1.0] | | | | [removed: 0.2] [added: 0.3] | | | | [removed: 1.3] [added: 0.2] | | | | [removed: 0.1] [added: 0.7] | | | | [removed: (1.1] [added: 0.1] | [removed: )] | |

| Operating [removed: (Loss)] Profit [added: (Loss)] | | | [added: 10.0 | | | |] (1.2 | ) | | | 14.2 | | | | [removed: 0.4] [added: 11.2] | | | | (15.4 | ) | | [removed: | 13.8 | | |]

The following table sets forth the factors that contributed to the gross margin changes in each of [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] compared to the prior year:

| | | [added: 2021 | | | |] 2020 | | | | 2019 | | |

| Prior year gross margin | | | [removed: 64.5] [added: 61.2] | % | | | [removed: 63.9] [added: 64.5] | % |

The expected completion date of the spinoff of ZimVie is March 1, 2022.

The following discussion and analysis includes these businesses in our discussion of financial condition and results of operations.

The timing, level and sustainability of the recovery of elective surgical procedures has been difficult to predict, as a number of factors are involved, including which geographies are affected and the different measures governments and healthcare systems take in response to the virus in those areas.

In the second half of 2021, the highly transmissible Delta and Omicron variants resulted in further deferrals of elective surgical procedures.

Additionally, we believe that staffing shortages at hospitals are also contributing to the deferral of elective surgical procedures.

Our net earnings were $401.6 million in 2021 compared to a net loss of $138.9 million in 2020.

In 2021, we returned to profitability compared to a net loss in 2020, primarily due to higher net sales combined with fixed operating costs that did not increase proportionally to the increase in net sales, and a reduction in operating expenses including goodwill and intangible asset impairment charges and certain fixed overhead and hourly production worker labor expenses.

In 2020, we recognized $645.0 million of goodwill and intangible asset impairment charges primarily due to the forecasted impact of COVID-19 on our operating results.

The additional expense for suspended and limited production continued throughout 2020 and while we did recognize similar charges in 2021, they were lower than the 2020 charges.

These reduced expenses in 2021 were partially offset by a charge for the early extinguishment of debt, higher research and development expenses, including certain agreements we entered into to gain access to or acquire third-party in-process R&D projects, higher consulting and professional service expenses related to the planned spinoff of our Spine and Dental businesses, and higher litigation-related charges.

2022 Outlook

As previously mentioned, we expect to spin off our Spine and Dental businesses on March 1, 2022.

We expect to apply discontinued operations accounting after the separation, which will require us to recast our prior period results to reflect both continuing and discontinued operations.

Accordingly, it is difficult to provide forward-looking information that is comparable to our historical results until the recasting of prior periods is complete.

resources towards achieving operating profit goals.

| Americas | | $ | 4,800.2 | | | $ | 4,335.4 | | | | 10.7 | | % | | 11.7 | | % | | (1.2 | ) | % | | 0.2 | | % |

| EMEA | | | 1,671.1 | | | | 1,391.3 | | | | 20.1 | | | | 16.7 | | | | (0.3 | ) | | | 3.7 | | |

| Asia Pacific | | | 1,364.9 | | | | 1,297.8 | | | | 5.2 | | | | 8.9 | | | | (5.5 | ) | | | 1.8 | | |

| Total | | $ | 7,836.2 | | | $ | 7,024.5 | | | | 11.6 | | | | 12.1 | | | | (1.8 | ) | | | 1.3 | | |

| | | 2021 | | | | 2020 | | | | % Inc | | | | Mix | | | | Price | | | | Exchange | | | |

| Knees | | $ | 2,647.9 | | | $ | 2,378.3 | | | | 11.3 | | % | | 12.4 | | % | | (2.4 | ) | % | | 1.3 | | % |

| Hips | | | 1,856.1 | | | | 1,750.5 | | | | 6.0 | | | | 8.2 | | | | (3.3 | ) | | | 1.1 | | |

| S.E.T. | | | 1,727.8 | | | | 1,525.6 | | | | 13.3 | | | | 12.2 | | | | (0.3 | ) | | | 1.4 | | |

| Spine & Dental | | | 1,008.8 | | | | 897.0 | | | | 12.5 | | | | 11.8 | | | | (0.3 | ) | | | 1.0 | | |

| Other | | | 595.6 | | | | 473.1 | | | | 25.9 | | | | 26.7 | | | | (1.7 | ) | | | 0.9 | | |

| Total | | $ | 7,836.2 | | | $ | 7,024.5 | | | | 11.6 | | | | 12.1 | | | | (1.8 | ) | | | 1.3 | | |

| Knees | | $ | 2,378.3 | | | $ | 2,780.6 | | | | (14.5 | ) | % | | (12.1 | ) | % | | (2.7 | ) | % | | 0.3 | | % |

| S.E.T. | | | 1,525.6 | | | | 1,652.5 | | | | (7.7 | ) | | | (5.9 | ) | | | (2.1 | ) | | | 0.3 | | |

| Spine & Dental | | | 897.0 | | | | 1,021.8 | | | | (12.2 | ) | | | (11.4 | ) | | | (1.3 | ) | | | 0.5 | | |

| Other | | | 473.1 | | | | 595.8 | | | | (20.6 | ) | | | (19.1 | ) | | | (1.9 | ) | | | 0.4 | | |

| Americas | | $ | 1,574.2 | | | $ | 1,444.7 | | | $ | 1,645.4 | | | | 9.0 | | % | | (12.2 | ) | % |

| EMEA | | | 588.9 | | | | 485.6 | | | | 650.6 | | | | 21.3 | | | | (25.4 | ) | |

| Asia Pacific | | | 484.8 | | | | 448.0 | | | | 484.6 | | | | 8.2 | | | | (7.6 | ) | |

| Total | | $ | 2,647.9 | | | $ | 2,378.3 | | | $ | 2,780.6 | | | | 11.3 | | | | (14.5 | ) | |

Volume trends were positive in 2021 as elective surgical procedures were not as significantly impacted by the COVID-19 pandemic as compared to 2020 when there were significant deferrals at the beginning of the pandemic.

However, 2021 did experience periods with higher deferrals of elective surgical procedures, most notably at the beginning of 2021 before vaccines were widely available and during surges of the Delta and Omicron virus variants.

Accordingly, net sales in 2021 did not return to the pre-pandemic levels of 2019.

The volume increases in 2021 were largely a product of how much the COVID-19 pandemic negatively affected the various regions in 2020.

In EMEA, stay-at-home measures were far more prevalent than other geographies in 2020 and therefore volume increases were greater in this region in 2021 as elective surgical procedures resumed.

In Asia Pacific, containment of the COVID-19 virus varied from country-to-country in 2020, but overall some of our larger markets in this region were not as affected in 2020 as other locations.

This resulted in net sales declines of 9.7 percent and 38.3 percent in the first and second quarters of 2020, respectively, when compared to the same prior year periods.

In the third quarter of 2020, various levels of recovery in elective surgical procedures occurred resulting in net sales growth of 2.0 percent when compared to the same prior year period.

However, in the fourth quarter of 2020 we saw the pandemic worsen and elective surgical procedures were deferred again, especially late in the quarter.

This was particularly prevalent in EMEA.

As a result, our net sales declined in the fourth quarter of 2020 by 1.9 percent when compared to the same prior year period.

With the deferral of elective surgical procedures, we have taken prudent measures in an effort to maintain an adequate financial profile to have access to capital to fund the business during these unprecedented times.

In response to the COVID-19 pandemic, we have temporarily reduced discretionary spending such as travel, meetings and other project spend that can be delayed with limited long-term detriment to the business, and we have temporarily suspended or limited production at certain manufacturing facilities.

However, to date we have not experienced significant disruptions in our supply chain, or in our ability to meet our customer demands.

We recognized a net loss of $138.9 million in the year ended December 31, 2020.

The loss was largely attributable to the impacts of COVID-19, which caused lower net sales and was the primary driver behind $645.0 million of goodwill and intangible asset impairment charges.

Pursuant to our 2019 Restructuring Plan, we also incurred higher restructuring and other cost reduction initiative expenses in 2020 when compared to 2019.

Lastly, in 2020 we recognized net litigation-related charges of $159.8 million compared to net litigation-related charges of $41.5 million in 2019.

These unfavorable items were partially offset by savings from our 2019 Restructuring Plan and lower costs for travel, meetings and other projects due to COVID-19.

2021 Outlook

However, at this time we are optimistic the rollout of vaccines around the world will change those dynamics and elective surgical procedures will be able to return to pre-pandemic levels at some point during 2021.

Additionally, since the clinical need for many of our products does not go away, it is possible once patients and hospitals have confidence to return to elective surgical procedures the patient backlog from deferred procedures may have a positive effect on the underlying market growth.

However, the consequences of COVID-19 continue to be fluid, and it is difficult to predict its ongoing impacts to our business and broader economic and market environments.

If the negative impacts of COVID-19 on our net sales subsides, we believe we can improve our operating profit margin since our fixed costs would not increase proportionally to net sales.

| Americas | | $ | 4,875.8 | | | $ | 4,837.2 | | | | 0.8 | | % | | 4.0 | | % | | (3.0 | ) | % | | (0.2 | ) | % |

| EMEA | | | 1,746.9 | | | | 1,801.9 | | | | (3.1 | ) | | | 4.3 | | | | (2.1 | ) | | | (5.3 | ) | |

| Asia Pacific | | | 1,359.5 | | | | 1,293.8 | | | | 5.1 | | | | 9.1 | | | | (2.2 | ) | | | (1.8 | ) | |

| Total | | $ | 7,982.2 | | | $ | 7,932.9 | | | | 0.6 | | | | 4.9 | | | | (2.7 | ) | | | (1.6 | ) | |

| Knees | | $ | 2,389.8 | | | $ | 2,810.1 | | | | (15.0 | ) | % | | (12.6 | ) | % | | (2.7 | ) | % | | 0.3 | | % |

| S.E.T. | | | 1,322.0 | | | | 1,444.1 | | | | (8.4 | ) | | | (6.5 | ) | | | (2.3 | ) | | | 0.4 | | |

| Dental, Spine & CMFT | | | 1,043.7 | | | | 1,161.3 | | | | (10.1 | ) | | | (9.4 | ) | | | (1.2 | ) | | | 0.5 | | |

| Other | | | 518.5 | | | | 635.2 | | | | (18.4 | ) | | | (16.9 | ) | | | (1.9 | ) | | | 0.4 | | |

| Knees | | $ | 2,810.1 | | | $ | 2,773.7 | | | | 1.3 | | % | | 6.2 | | % | | (3.0 | ) | % | | (1.9 | ) | % |

| Hips | | | 1,931.5 | | | | 1,918.9 | | | | 0.7 | | | | 5.6 | | | | (3.1 | ) | | | (1.8 | ) | |

| S.E.T. | | | 1,444.1 | | | | 1,401.2 | | | | 3.1 | | | | 6.0 | | | | (1.6 | ) | | | (1.3 | ) | |

| Dental, Spine & CMFT | | | 1,161.3 | | | | 1,175.1 | | | | (1.2 | ) | | | 2.1 | | | | (2.0 | ) | | | (1.3 | ) | |

| Other | | | 635.2 | | | | 664.0 | | | | (4.3 | ) | | | 0.8 | | | | (4.0 | ) | | | (1.1 | ) | |

| Americas | | $ | 1,461.1 | | | $ | 1,676.6 | | | $ | 1,642.7 | | | | (12.9 | ) | % | | 2.1 | | % |

| EMEA | | | 487.0 | | | | 654.1 | | | | 672.3 | | | | (25.6 | ) | | | (2.7 | ) | |

| Asia Pacific | | | 441.7 | | | | 479.4 | | | | 458.7 | | | | (7.8 | ) | | | 4.5 | | |

| Total | | $ | 2,389.8 | | | $ | 2,810.1 | | | $ | 2,773.7 | | | | (15.0 | ) | | | 1.3 | | |

Volume trends were negative in the first and second quarters of 2020 as the COVID-19 pandemic resulted in the deferral of elective surgical procedures.

In the third quarter of 2020, we experienced various levels of recovery in elective surgical procedures, resulting in positive volume and mix compared to the same prior year period.

However, in the fourth quarter of 2020 as the pandemic surged, volume trends again were negative compared to the same prior year period in many regions and we expect this trend to continue into 2021 until vaccines or other preventative measures lessen the spread of infection and patient reluctance.

In EMEA, stay-at-home measures were far more prevalent than other geographies, especially in the second and fourth quarters, resulting in EMEA volume and mix trends being the worst among our geographic regions for the full year.

In Asia Pacific, containment of the COVID-19 virus varied from country-to-country, but overall volume and mix trends were positive in Asia Pacific in the second half of 2020 as our three largest markets of Japan, China and Australia/New Zealand all had sales growth in the fourth quarter of 2020.

For contracts outstanding at December 31, [removed: 2020,] [added: 2021,] we had obligations to purchase U.S. Dollars and sell Euros, Japanese Yen, British Pounds, Canadian Dollars, Australian Dollars, Korean Won, Swedish Krona, Czech Koruna, Thai Baht, Taiwan Dollars, South African Rand, Russian Rubles, Indian Rupees, Turkish Lira, Polish Zloty, Danish Krone, and Norwegian Krone and purchase Swiss Francs and sell U.S. Dollars at set maturity dates ranging from January [removed: 2021] [added: 2022] through June [removed: 2023.][added: 2024.]

The notional amounts of outstanding forward contracts entered into with third parties to purchase U.S. Dollars at December 31, [removed: 2020] [added: 2021] were [removed: $1,605.9] [added: $1,295.2] million.

The notional amounts of outstanding forward contracts entered into with third parties to purchase Swiss Francs at December 31, [removed: 2020] [added: 2021] were [removed: $283.8] [added: $347.0] million.

A sensitivity analysis of changes in the fair value of foreign currency exchange forward contracts outstanding at December 31, [removed: 2020] [added: 2021] indicated that, if the U.S. Dollar uniformly [removed: strengthened/weakened] [added: strengthened or weakened] in value by 10 percent relative to all currencies, with no change in the interest differentials, the fair value of those contracts would [removed: increase or decrease] [added: affect] earnings [added: in a range of a decrease of approximately $98 million to an increase of approximately $91 million] before income taxes in periods through June [removed: 2023 by approximately $55.0 million.][added: 2024.]

We had net assets, excluding goodwill and intangible assets, in legal entities with non-U.S. Dollar functional currencies of [removed: $1,369.0] [added: $1,442.8] million at December 31, [removed: 2020.][added: 2021.]

We enter into foreign currency forward exchange contracts with terms of one [removed: month] to [added: three months to] manage currency exposures for monetary assets and liabilities denominated in a currency other than an entity’s functional currency.

Based upon our overall interest rate exposure as of December 31, [removed: 2020,] [added: 2021,] a change of 10 percent in interest rates, assuming the principal amount outstanding remains constant, would not have a material effect on interest expense, net.

[removed: CREDIT RISK][added: CREDIT RISK]

Since we sell products to public hospitals in those countries, we are indirectly exposed to government budget [removed: constraints.][added: constraints and price reduction initiatives.]

A 10 percent price change across all these commodities would not have a material effect on our consolidated financial position, results of operations or cash flows.

We design, manufacture and market orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; [removed: office based technologies;] spine, craniomaxillofacial and thoracic (“CMFT”) products; dental implants; and related surgical products.

Consignment sales represented approximately 80 percent of our net sales in [removed: 2020.][added: 2021.]

No individual customer accounted for more than 1 percent of our net sales for [removed: 2020.][added: 2021.]

[removed: Additionally, we keep current with key surgical] developments and other issues related to orthopedic surgeons, neurosurgeons, other specialists, dentists and oral surgeons and the medical and dental procedures they perform.

We allocate resources to achieve our operating profit goals through [removed: three] [added: four] operating segments.

Our operating segments are comprised of Americas [removed: and Global Businesses,] [added: Orthopedics;] Europe, Middle East and Africa [removed: (“EMEA”) and] [added: (“EMEA”);] Asia [removed: Pacific.][added: Pacific; and Americas Spine and Global Dental.]

[removed: *Americas* *and Global Businesses.*] The Americas [removed: and Global Businesses] [added: Orthopedics] operating segment is our largest operating segment.

This segment is comprised principally of the U.S. and includes other North, Central and South American markets for [removed: all of] our [added: orthopedic] product [removed: categories as well as the global results for our Dental products division.][added: categories.]

This segment also includes [removed: our global manufacturing operations for all product categories and] research, development engineering, medical education, and brand management for our [removed: global] [added: orthopedic] product category headquarter locations.

The U.S. accounts for [added: approximately] 95 percent of net sales in this region.

France, Germany, Italy, Spain and the United Kingdom collectively account for [removed: 57] [added: approximately 55] percent of net sales in the region.

Japan is the largest market within this segment, accounting for [added: approximately] 50 percent of the region’s sales.

Due to the COVID-19 global pandemic, the typical seasonal patterns did not occur in [removed: 2020.][added: 2020 or 2021.]

[removed: Distribution][added: Distribution]

Our products include orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; [removed: office based technologies;] spine and CMFT products; dental implants; and related surgical products.

In 2019, we entered the robotic assistance market with our ROSA® [removed: Knee System.][added: Robot.]

| | • | Persona® [removed: The Personalized] Knee [removed: System] |

| | • | NexGen® [removed: Complete] Knee [removed: Solution] [added: Implants] |

Our S.E.T. product category includes sports medicine, biologics, foot and ankle, [removed: extremities and] [added: extremities,] trauma [added: and CMFT] products.

[removed: Our trauma products are used to stabilize damaged or broken] bones and their surrounding tissues to support the body’s natural healing process.

| | • | [removed: Zimmer®] Trabecular [removed: MetalTM] [added: Metal®] Reverse [added: Plus®] Shoulder System |

| | • | [removed: Zimmer®] Natural Nail® System |

[removed: DENTAL,] SPINE and [removed: CMFT][added: DENTAL]

[removed: We have] [added: In 2021, we] entered the robotic [added: assistance] market [added: for hips] with our [removed: ROSA ONE® Spine.][added: ROSA® Robot.]

Our CMFT [added: product] division includes face and skull reconstruction products as well as products that fixate and stabilize the bones of the chest in order to facilitate healing or reconstruction after open heart surgery, trauma or for deformities of the chest.

Our significant [removed: dental,] spine and [removed: CMFT] [added: dental] brands include the following:

| | • | SternaLock® [removed: Blu Closure] System |

Our other product category primarily includes our [removed: surgical,] [added: robotic, surgical and] bone cement [removed: and office based technology] products.

As of December 31, [removed: 2020,] [added: 2021,] we employed approximately 2,000 research and development employees worldwide.

The U.S. Food and Drug Administration (“FDA”) has enacted regulations that control all [added: aspects of the development, manufacture, advertising, promotion and postmarket surveillance of medical products, including medical devices.]

Any adverse regulatory action, depending on its magnitude, may restrict us from effectively manufacturing, marketing and selling our products and could have a material adverse effect on our business, [removed: financial condition and results of operations.]

[added: In] addition, exported medical products are subject to the regulatory requirements of each country to which the medical product is exported.

The effective date for the MDR [removed: has been] [added: was] extended [added: to May 2021] due to the COVID-19 [removed: pandemic, with it currently scheduled to become effective in May 2021.][added: pandemic.]

The FDA has issued guidance to which we may be subject concerning data security for medical [added: devices.]

Other state laws include the California Consumer Privacy Act (“CCPA”), which [removed: was signed into law on June 28, 2018 and] took effect on January 1, 2020.

In the spine [removed: and CMFT categories,] [added: product category,] we compete globally primarily with the spinal and biologic business of Medtronic plc, the DePuy Synthes Companies, Stryker Corporation, NuVasive, Inc. and Globus [removed: Medical,] [added: Medical] Inc.

[removed: Human Capital][added: Human Capital]

As of December 31, [removed: 2020,] [added: 2021,] we employed approximately [removed: 20,000] [added: 19,500] employees worldwide, including approximately 2,000 employees dedicated to research and development.

Approximately [removed: 10,000] [added: 9,000] employees are located within the U.S. and approximately [removed: 10,000] [added: 10,500] employees are located outside of the U.S., primarily throughout Europe and in Japan and China.

We have approximately [removed: 8,500] [added: 8,000] employees dedicated to manufacturing our products worldwide.

On February 5, 2021, we announced our intention to pursue a plan to spin off our Spine and Dental businesses into a new public company named ZimVie Inc. (“ZimVie”).

The planned transaction is intended to benefit our stockholders by enhancing the focus of both Zimmer Biomet and ZimVie to meet the needs of patients and customers and, therefore, achieve faster growth and deliver greater value for all stakeholders.

The transaction is intended to qualify as a tax-free distribution, for U.S. federal income tax purposes, to U.S. stockholders of new publicly traded stock in ZimVie.

The expected completion date of the spinoff is March 1, 2022.

Additionally, we keep current with key surgical

Americas Orthopedics.

In certain countries of this region, healthcare is sponsored by governments.

Most notably, in 2021 the Chinese government began to implement a nationwide volume-based procurement (“VBP”) process across certain of our product categories that negatively affected our net sales due to distributor inventory reductions, ongoing pricing negotiations with distributor partners, revaluation of channel inventory and volume reductions as patients deferred procedures until after VBP pricing has become effective.

Americas Spine and Global Dental.

The Americas Spine and Global Dental operating segment constitutes a majority of the operations that will be spun off to ZimVie.

The U.S. accounts for approximately 75 percent of sales in this operating segment.

The Americas Spine market dynamics are similar to Americas Orthopedics.

However, the Spine business maintains a separate sales force of independent sales agents.

The ROSA® Robot can be used for total knee arthroplasty or partial knee arthroplasty.

Our trauma products are used to stabilize damaged or broken

| | • | The TetherTM Vertebral Body Tethering System |

financial condition and results of operations.

The CPRA is scheduled to take effect on January 1, 2023, with a lookback to January 1, 2022.

We have established 2026 representation goals for women and POC at all levels of the organization, guided by internal data and external benchmarking.

Core to our values is our commitment to stand together against hatred, discrimination and injustice, and we advance these values through our actions and investments.

In 2021, our Total Recordable Incident Rate was 0.29 and our Lost Time Incident Rate was 0.14.

| Ivan Tornos | | 46 | | Chief Operating Officer |

| Lori Winkler | | 60 | | Senior Vice President, Chief Human Resources Officer |

He was subsequently named Chairman of the Board of Directors in May 2021.

Previously, he served as the Company’s Vice President, Finance Integration since August 2020, and the Vice President, Global Integration of the Company since June 2015.

Mr. Davis served as the Vice President, Finance and Corporate Controller and Chief Accounting Officer, the principal accounting officer, of the Company from May 2007 until June 2015.

Mr. Tornos was appointed Chief Operating Officer in March 2021.

Previously, he served as the Company’s Group President, Global Businesses and the Americas since December 2019 and prior to that as Group President, Orthopedics since joining the Company in November 2018.

He has also served as a member of the board of directors at PHC Holdings Corporation since September 2021.

Prior to joining Zimmer Biomet, Mr. van Zuilen served in various roles for Medtronic plc, including as Vice President, North Western Europe from October 2020 to May 2021, as Vice President, Restorative Therapies Group EMEA from February 2017 through September 2020, and as Vice President, Advanced Surgical Technologies Europe, Surgical Solution Group, from October 2011 through January 2017.

He served in other roles of increasing responsibility with Medtronic plc through January 1998.

Before joining Medtronic, he spent more than five years in medical sales, most recently with Baxter BV (Edwards Life Sciences).

Ms. Winkler joined Zimmer Biomet as Group Vice President of Human Resources in March 2020 and was appointed Senior Vice President, Chief Human Resources Officer in February 2021.

Prior to joining Zimmer Biomet, she served Cardinal Health as a Worldwide Vice President of Human Resources in the Medical Segment from November 2016 through January 2020.

Before joining Cardinal Health, Ms. Winkler served more than 20 years with Johnson and Johnson, including its subsidiary companies DePuy and Cordis, most recently as Global Head, Human Resources Global Finance from April 2011 through November 2016.

In the future, we plan to expand the use of our ROSA® Robot to other product categories.

| --- | --- | --- |

| | • | Zimmer® M/L Taper Hip Prosthesis |

| | • | Continuum® Acetabular System |

A developing trend in spine surgeries is the use of robotic technologies to assist a surgeon in performing minimally invasive procedures.

| | • | Polaris™ Spinal System |

| | • | The TetherTM |

| | • | SternaLock® Rigid Sternal Fixation |

aspects of the development, manufacture, advertising, promotion and postmarket surveillance of medical products, including medical devices.

In

devices.

We recently made a statement about standing together united against hatred, discrimination and injustice.

However, we understand that words are not enough; we must act and be held accountable.

| Ivan Tornos | | 45 | | Group President, Global Businesses and the Americas |

He is responsible for the marketing, sales and distribution of products, services and solutions in the European, Middle Eastern and African (“EMEA”) regions.

Prior to joining Zimmer Biomet, Mr. Deltort served as Senior Vice President and General Manager, Global Healthcare Solutions and Partnerships of Boston Scientific Corporation, based in France from May 2016 until August 2018.

Before joining Boston Scientific Corporation, he spent 14 years with GE Healthcare in positions of increasing responsibility in Germany, Finland, Dubai and the United States, most recently serving as Global Senior Vice President and General Manager of the global Monitoring Solutions business as well as Managing Director of GE Healthcare Finland.

Prior to GE, Mr. Deltort served at Philips, Hewlett-Packard and Marquette Electronics in various international healthcare executive roles.

Prior to joining Zimmer Biomet, Ms. Nichol served as Senior Vice President, Controller and Chief Accounting Officer of Endo International plc (“Endo International”) from April 2018 to September 2019, having served in roles of increasing responsibility from March 2015 to April 2018.

Prior to her tenure at Endo International, Ms. Nichol served as Senior Vice President and Controller of Haas Group Inc. (now part of Wesco Aircraft Holdings, Inc.), where she led the global accounting and finance teams from June 2011 until March 2015.

Prior to her employment with Haas Group Inc., Ms. Nichol was with IKON Office Solutions (now part of Ricoh Company, Ltd.) for a total of five years from June 2008 until June 2011 and from June 2003 until July 2005, having served most recently as the Director of Financial Reporting and Corporate Accounting.

From December 2005 until June 2008, Ms. Nichol was with Advanced Metallurgical Group NV serving as Assistant Controller.

Ms. Nichol began her career in public accounting with KPMG.

Mr. Phipps

Mr. Tornos joined Zimmer Biomet in November 2018 as Group President, Orthopedics, and in December 2019 was appointed Group President, Global Businesses and the Americas.

For year ended December 31, [removed: 2020][added: 2021]

The aggregate market value of shares held by non-affiliates [removed: was$24,675,479,718] [added: was $33,533,707,317] (based on the closing price of these shares on the New York Stock Exchange on June 30, [removed: 2020] [added: 2021] and assuming solely for the purpose of this calculation that all directors and executive officers of the registrant are “affiliates”).

As of February [removed: 8, 2021, 207,855,504] [added: 7, 2022, 209,177,445] shares of the registrant’s $.01 par value common stock were outstanding.

| Portions of the Proxy Statement with respect to the [removed: 2021] [added: 2022] Annual Meeting of Stockholders | | Part III |

[removed: These risks, uncertainties and changes in circumstances include, but are not limited to: the effects of the COVID-19 global pandemic and other adverse public health developments on the global economy, our business and operations and the business and operations of our suppliers and customers, including the deferral of elective procedures and our ability to collect accounts receivable; the risks and uncertainties related to our ability to successfully execute our restructuring plans; our ability to attract, retain and develop the highly skilled employees we need to support our business; the possibility that the anticipated synergies and other benefits from mergers and acquisitions will not be realized, or will not be realized within the expected time periods; the risks and uncertainties related to our ability to successfully integrate the operations, products, employees and distributors of acquired companies; the effect of the potential disruption of management's attention from ongoing business operations due to integration matters related to mergers and acquisitions; the effect of mergers and acquisitions on our relationships with customers, suppliers and lenders and on our operating results and businesses generally; the risks and uncertainties associated with the proposed spin-off of our Spine and Dental businesses, including, without limitation, the significant expenses, time and efforts related to implementing such transaction, the ability to complete the transaction on our expected timeline or at all, the tax-free nature of the transaction, possible disruptions in our relationships with customers, suppliers and other business partners, and the possibility that the anticipated benefits and synergies of the transaction, strategic and competitive advantages of each company, and future growth and other opportunities for each company will not be realized within the expected time periods or at all; the success of our quality and operational excellence initiatives, including ongoing quality remediation efforts at our Warsaw North Campus facility; the ability to remediate matters identified in inspectional observations or warning letters issued by the U.S. Food and Drug Administration (FDA), while continuing to satisfy the demand for our products; the impact of substantial indebtedness on our ability to service our debt obligations and/or refinance amounts outstanding under our debt obligations at maturity on terms favorable to us, or at all; the ability to retain the independent agents and distributors who market our products; dependence on a limited number of suppliers for key raw materials and outsourced activities; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the FDA and foreign government regulators, such as more stringent requirements for regulatory clearance of products; the outcome of government investigations; competition; pricing pressures; changes in customer demand for our products and services caused by demographic changes or other factors; the impact of healthcare reform measures; reductions in reimbursement levels by third-party payors and cost containment efforts of healthcare 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; the ability to obtain and maintain adequate intellectual property protection; breaches or failures of our information technology systems or products, including by cyberattack, unauthorized access or theft; the ability to form and implement alliances; changes in tax obligations arising from tax reform measures, including European Union rules on state aid, or examinations by tax authorities; product liability, intellectual property and commercial litigation losses; changes in general industry and market conditions, including domestic and international growth rates; changes in general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; and the impact of the ongoing financial and political uncertainty on countries in the Euro zone on the ability to collect accounts receivable in affected countries.][added: These risks, uncertainties and changes in circumstances include, but are not limited to: the effects of the COVID-19 global pandemic and other adverse public health developments on the global economy, our business and operations and the business and operations of our suppliers and customers, including the deferral of elective surgical procedures and our ability to collect accounts receivable; the failure of vaccine rollouts and other strategies to mitigate or reverse the impacts of the COVID-19 pandemic; the failure of elective surgical procedures to recover at the levels or on the timeline anticipated; the risks and uncertainties related to our ability to successfully execute our restructuring plans; our ability to attract, retain and develop the highly skilled employees we need to support our business; the risks and uncertainties associated with the planned spinoff of ZimVie Inc., including, without limitation, the significant expenses, time and efforts related to implementing such transaction, the ability to complete the transaction on our expected timeline or at all, the tax-free nature of the transaction, the tax-efficient nature of any subsequent distribution of any ZimVie Inc. common stock we retain, possible disruptions in our relationships with customers, suppliers and other business partners, and the possibility that the anticipated benefits and synergies of the transaction, strategic and competitive advantages of each company, and future growth and other opportunities will not be realized within the expected time periods or at all; the success of our quality and operational excellence initiatives, including ongoing quality remediation efforts at our Warsaw North Campus facility; the ability to remediate matters identified in inspectional observations or warning letters issued by the U.S. Food and Drug Administration (FDA), while continuing to satisfy the demand for our products; the impact of substantial indebtedness on our ability to service our debt obligations and/or refinance amounts outstanding under our debt obligations at maturity on terms favorable to us, or at all; the ability to retain the employees, independent agents and distributors who market our products; dependence on a limited number of suppliers for key raw materials and outsourced activities; the possibility that the anticipated synergies and other benefits from mergers and acquisitions will not be realized, or will not be realized within the expected time periods; the risks and uncertainties related to our ability to successfully integrate the operations, products, employees and distributors of acquired companies; the effect of the potential disruption of management’s attention from ongoing business operations due to integration matters related to mergers and acquisitions; the effect of mergers and acquisitions on our relationships with customers, suppliers and lenders and on our operating results and businesses generally; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the FDA and foreign government regulators, such as more stringent requirements for regulatory clearance of products; the outcome of government investigations; competition; pricing pressures; changes in customer demand for our products and services caused by demographic changes or other factors; the impact of healthcare reform measures; reductions in reimbursement levels by third-party payors and cost containment efforts sponsored by government agencies, legislative bodies, the private sector and healthcare purchasing organizations, including the volume-based procurement process in China; 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; the ability to obtain and maintain adequate intellectual property protection; breaches or failures of our information technology systems or products, including by cyberattack, unauthorized access or theft; the ability to form and implement alliances; changes in tax obligations arising from tax reform measures, including European Union rules on state aid, or examinations by tax authorities; product liability, intellectual property and commercial litigation losses; changes in general industry and market conditions, including domestic and international growth rates; changes in general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; the domestic and international business impact of political, social and economic instability, tariffs, trade embargoes, sanctions, wars, disputes and other conflicts; and the impact of the ongoing financial and political uncertainty on countries in EMEA on the ability to collect accounts receivable in affected countries.]

[added: You are advised,] however, to consult any further disclosures we make on related subjects in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

| Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#ITEM_7A_QUANTITATIVE_QUALITATIVE_DISCLOS) | | [removed: 44] [added: 43] |

| Item 8. | [Financial Statements and Supplementary Data](#ITEM_8_FINANCIAL_STATEMENTS_SUPPLEMENTAR) | | [removed: 47] [added: 46] |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#ITEM_9_CHANGES_IN_DISAGREEMENTS_WITH_ACC) | | [removed: 97] [added: 100] |

| Item 9A. | [Controls and Procedures](#ITEM_9A_CONTROLS_PROCEDURES) | | [removed: 97] [added: 100] |

| Item 9B. | [Other Information](#ITEM_9B_OR_INFORMATION) | | [removed: 98] [added: 101] |

| [PART III](#PART_III) | | | [removed: 99] [added: 102] |

| Item 10. | [Directors, Executive Officers and Corporate Governance](#ITEM_10_DIRECTORS_EXECUTIVE_FICERS_CORPO) | | [removed: 99] [added: 102] |

| Item 11. | [Executive Compensation](#ITEM_11_EXECUTIVE_COMPENSATION) | | [removed: 99] [added: 102] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ITEM_12_SECURITY_OWNERSHIP_CERTAIN_BENEF) | | [removed: 99] [added: 102] |

| Item 13. | [Certain Relationships and Related Transactions and Director Independence](#ITEM_13_CERTAIN_RELATIONSHIPS_RELATED_TR) | | [removed: 99] [added: 102] |

| Item 14. | [Principal Accountant Fees and Services](#ITEM_14_PRINCIPAL_ACCOUNTING_FEES_SERVIC) | | [removed: 99] [added: 102] |

| Item 15. | [Exhibits and Financial Statement Schedules](#ITEM_15_EXHIBITS_FINANCIAL_STATEMENT_SCH) | | [removed: 100] [added: 103] |

| Item 16. | [Form 10-K Summary](#ITEM_16_10K_SUMMARY) | | [removed: 105] [added: 108] |

I have

| Item 6. | [\[Reserved\]](#ITEM_6_RESERVED) | | 31 |

| Item 9C. | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#ITEM_9C_DIS_REG_FOR_JUR_T_PRE_INS) | | 101 |

| [PART IV](#PART_IV) | | | 103 |

| | | | |

| | | |

You are advised,

| Item 6. | [Selected Financial Data](#ITEM_6_SELECTED_FINANCIAL_DATA) | | 31 |

| [PART IV](#PART_IV) | | | 100 |

We own or lease approximately [removed: 350] [added: 340] different facilities around the world, of which approximately half are in the U.S. Our corporate headquarters is in Warsaw, Indiana.

Our Spine, [removed: CMFT, Office Based Technologies] [added: CMFT] and Dental products divisions also have business unit headquarters located in the U.S. that are the primary facilities for these product divisions’ manufacturing, R&D and other business activities.

We have approximately [removed: 30] [added: 35] manufacturing locations in the U.S. and internationally.

We maintain sales and administrative offices and warehouse and distribution facilities in more than [removed: 40] [added: 45] countries around the world.

Our common stock is traded on the New York Stock Exchange and the SIX Swiss Exchange under the symbol “ZBH.” As of February [removed: 3, 2021,] [added: 8, 2022,] there were approximately [removed: 16,700] [added: 15,400] holders of record of our common stock.

The financial information for each of the past five years ended December 31 is set forth below (in millions, except per share amounts):

| | | 2020 | | | | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| STATEMENT OF EARNINGS DATA | | | | | | | | | | | | | | | | | | | | |

| Net sales | | $ | 7,024.5 | | | $ | 7,982.2 | | | $ | 7,932.9 | | | $ | 7,803.3 | | | $ | 7,668.4 | |

| Net (loss) earnings of Zimmer Biomet Holdings, Inc. | | | (138.9 | ) | | | 1,131.6 | | | | (379.2 | ) | | | 1,813.8 | | | | 305.9 | |

| (Loss) earnings per common share | | | | | | | | | | | | | | | | | | | | |

| Basic | | $ | (0.67 | ) | | $ | 5.52 | | | $ | (1.86 | ) | | $ | 8.98 | | | $ | 1.53 | |

| Diluted | | | (0.67 | ) | | | 5.47 | | | | (1.86 | ) | | | 8.90 | | | | 1.51 | |

| Dividends declared per share of common stock | | $ | 0.96 | | | $ | 0.96 | | | $ | 0.96 | | | $ | 0.96 | | | $ | 0.96 | |

| Average common shares outstanding | | | | | | | | | | | | | | | | | | | | |

| Basic | | | 207.0 | | | | 205.1 | | | | 203.5 | | | | 201.9 | | | | 200.0 | |

| Diluted | | | 207.0 | | | | 206.7 | | | | 203.5 | | | | 203.7 | | | | 202.4 | |

| BALANCE SHEET DATA | | | | | | | | | | | | | | | | | | | | |

| Total assets | | $ | 24,417.7 | | | $ | 24,638.7 | | | $ | 24,126.8 | | | $ | 26,014.0 | | | $ | 26,684.4 | |

| Long-term debt | | | 7,626.5 | | | | 6,721.4 | | | | 8,413.7 | | | | 8,917.5 | | | | 10,665.8 | |

| Other long-term obligations | | | 2,034.9 | | | | 2,083.0 | | | | 2,015.7 | | | | 2,291.3 | | | | 3,967.2 | |

| Stockholders' equity | | | 12,199.4 | | | | 12,392.8 | | | | 11,276.1 | | | | 11,735.5 | | | | 9,669.9 | |

| [Report of Independent Registered Public Accounting Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_ACC) [added: (PCAOB ID: 238)] | | [removed: 48] [added: 47] |

| [Consolidated Statements of Earnings for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#CONSOLIDATED_STATEMENTS_EARNINGS)] [added: 2019](#CONSOLIDATED_STATEMENTS_EARNINGS)] | | [removed: 51] [added: 50] |

| [Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN)] [added: 2019](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN)] | | [removed: 52] [added: 51] |

| [Consolidated Balance Sheets as of December 31, [removed: 2020] [added: 2021] and [removed: 2019](#CONSOLIDATED_BALANCE_SHEETS)] [added: 2020](#CONSOLIDATED_BALANCE_SHEETS)] | | [removed: 53] [added: 52] |

| [Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#CONSOLIDATED_STATEMENTS_STOCKHOLDERS_EQU)] [added: 2019](#CONSOLIDATED_STATEMENTS_STOCKHOLDERS_EQU)] | | [removed: 54] [added: 53] |

| [Consolidated Statements of Cash Flows for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018](#CONSOLIDATED_STATEMENTS_CASH_FLOWS)] [added: 2019](#CONSOLIDATED_STATEMENTS_CASH_FLOWS)] | | [removed: 55] [added: 54] |

| [Notes to Consolidated Financial Statements](#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMEN) | | [removed: 56] [added: 55] |

[removed: We have audited the accompanying consolidated balance sheets of Zimmer Biomet Holdings, Inc.] and its subsidiaries (the “Company”) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the related consolidated statements of earnings, [added: of] comprehensive income (loss), [added: of] stockholders’ equity and [added: of] cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended December 31, [removed: 2020] [added: 2021] appearing under Item [removed: 15(a)(2),] [added: 15(a)(2)] (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020] [added: 2021] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control [removed: -] [added: –] Integrated Framework* (2013) issued by the COSO.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in [removed: accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable]

[added: accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable] assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

As described in Notes 2 and 11 to the consolidated financial statements, the Company’s consolidated goodwill balance was [removed: $9,261.8] [added: $9,192.2] million as of December 31, [removed: 2020,] [added: 2021,] and the goodwill associated with the EMEA reporting unit, Dental reporting unit, and Americas CMFT reporting unit, was [removed: $325.9] [added: $317.3] million, [removed: $273.7] [added: $267.8] million and [removed: $271] [added: $290.9] million, respectively.

Management [removed: conducts] [added: performs] an impairment test in the fourth quarter of each year or whenever events or changes in circumstances indicate that the [removed: carrying] [added: fair] value of the reporting [removed: unit’s assets may] [added: unit is more likely than] not [removed: be recoverable.][added: below its carrying amount.]

[removed: The Company] [added: Management] estimated the fair value of the EMEA, Dental and Americas CMFT reporting units based on income and market approaches.

[removed: As disclosed by management, fair] [added: Fair] value under the income approach was determined by discounting to present value the estimated future cash flows of the reporting unit.

Significant assumptions are incorporated into the discounted cash flow analysis such as revenue growth [removed: rates] [added: rates, forecasted operating expenses,] and risk-adjusted discount rates.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the EMEA, Dental and Americas CMFT reporting units is a critical audit matter are [added: (i)] the significant judgment by management [added: related to the discounted cash flow analysis] when developing the fair value measurement of the reporting [removed: units.][added: units; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and in evaluating management’s significant assumptions related to revenue growth rates, forecasted operating expenses and risk-adjusted discount rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.]

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the [added: discounted cash flow analysis related to the] valuation of the Company’s reporting units.

These procedures also included, among others, (i) testing management’s process for developing the fair value [removed: estimate,] [added: estimate;] (ii) evaluating the appropriateness of management’s fair value [removed: approaches,] [added: approaches;] (iii) testing the [removed: completeness, accuracy] [added: completeness] and [removed: relevance] [added: accuracy] of the underlying data used in the [removed: approaches,] [added: discounted cash flow analysis,] and (iv) evaluating [added: the reasonableness of the] significant assumptions used by management in the discounted cash flow [removed: analysis, including] [added: analysis related to] the revenue growth [removed: rates] [added: rates, forecasted operating expenses,] and [removed: the] risk-adjusted discount [removed: rate.][added: rates.]

Evaluating management’s assumptions related to revenue growth rates [added: and forecasted operating expenses] involved evaluating whether the assumptions used by management were reasonable considering [added: (i)] the past performance of the reporting [removed: units,] [added: units; (ii)] the consistency with external data from [removed: other sources,] [added: market] and [added: industry sources; and (iii)] whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow analysis and [removed: certain significant assumptions, including] the risk-adjusted discount [removed: rate.][added: rate assumptions.]

As described in Notes 2 and 17 to the consolidated financial statements, the Company has recorded tax liabilities for unrecognized tax benefits of [removed: $619.4] [added: $558.6] million as of December 31, [removed: 2020.][added: 2021.]

| | | [removed: 2020] [added: 2021] | | | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | |

| Net Sales | | $ | [removed: 7,024.5] [added: 7,836.2] | | | $ | [removed: 7,982.2] [added: 7,024.5] | | | $ | [removed: 7,932.9] [added: 7,982.2] | |

| Cost of products sold, excluding intangible asset amortization | | | [removed: 2,128.3] [added: 2,341.0] | | | | [removed: 2,252.6] [added: 2,128.3] | | | | [removed: 2,271.9] [added: 2,252.6] | |

| Intangible asset amortization | | | [removed: 597.6] [added: 615.7] | | | | [removed: 584.3] [added: 597.6] | | | | [removed: 595.9] [added: 584.3] | |

| Research and development | | | [removed: 372.0] [added: 497.2] | | | | [removed: 449.3] [added: 372.0] | | | | [removed: 391.7] [added: 449.3] | |

| Selling, general and administrative | | | [removed: 3,177.8] [added: 3,323.9] | | | | [removed: 3,343.8] [added: 3,177.8] | | | | [removed: 3,379.3] [added: 3,343.8] | |

| Goodwill and intangible asset impairment | | | [removed: 645.0] [added: 16.3] | | | | [removed: 70.1] [added: 645.0] | | | | [removed: 979.7] [added: 70.1] | |

| Restructuring and other cost reduction initiatives | | | [removed: 116.9] [added: 129.1] | | | | [removed: 50.0] [added: 116.9] | | | | [removed: 34.2] [added: 50.0] | |

| Quality remediation | | | [removed: 50.9] [added: 53.1] | | | | [removed: 82.4] [added: 50.9] | | | | [removed: 146.9] [added: 82.4] | |

| Acquisition, [removed: integration] [added: integration, divestiture] and related | | | [removed: 23.8] [added: 79.8] | | | | [removed: 12.2] [added: 23.8] | | | | [removed: 99.5] [added: 12.2] | |

| Operating expenses | | | [removed: 7,112.3] [added: 7,056.1] | | | | [removed: 6,844.7] [added: 7,112.3] | | | | [removed: 7,899.1] [added: 6,844.7] | |

| Operating [removed: (Loss)] Profit [added: (Loss)] | | | [removed: (87.8] [added: 780.1] | [removed: )] | | | [removed: 1,137.5] [added: (87.8] | [added: )] | | | [removed: 33.8] [added: 1,137.5] | |

| Other income (expense), net | | | [removed: 25.4] [added: 11.8] | | | | [removed: (4.8] [added: 25.4] | [removed: )] | | | [removed: (15.6] [added: (4.8] | ) |

| Interest expense, net | | | [removed: (212.0] [added: (208.4] | ) | | | [removed: (226.9] [added: (212.0] | ) | | | [removed: (289.3] [added: (226.9] | ) |

| [removed: (Loss)] Earnings [added: (Loss)] before income taxes | | | [removed: (274.4] [added: 418.4] | [removed: )] | | | [removed: 905.8] [added: (274.4] | [added: )] | | | [removed: (271.1] [added: 905.8] | [removed: )] |

| [removed: (Benefit) provision] [added: Provision (benefit)] for income taxes | | | [removed: (137.0] [added: 16.3] | [removed: )] | | | [removed: (225.7] [added: (137.0] | ) | | | [removed: 108.2] [added: (225.7] | [added: )] |

We have audited the accompanying consolidated balance sheets of Zimmer Biomet Holdings, Inc.

February 25, 2022

| Loss on early extinguishment of debt | | | (165.1 | ) | | | \- | | | | \- | |

| | | 2021 | | | | 2020 | | |

| Prepaid taxes | | | 329.5 | | | | 208.8 | |

| Net earnings | | | \- | | | | \- | | | | \- | | | | 401.6 | | | | \- | | | | \- | | | | \- | | | | 0.5 | | | | 402.1 | |

| Other comprehensive income | | | \- | | | | \- | | | | \- | | | | \- | | | | 66.2 | | | | \- | | | | \- | | | | \- | | | | 66.2 | |

| Stock compensation plans | | | 1.4 | | | | \- | | | | 193.2 | | | | 4.1 | | | | \- | | | | \- | | | | 1.8 | | | | \- | | | | 199.1 | |

| Balance December 31, 2021 | | | 312.8 | | | $ | 3.1 | | | $ | 9,314.8 | | | $ | 10,292.2 | | | $ | (231.6 | ) | | | (103.8 | ) | | $ | (6,717.8 | ) | | $ | 5.7 | | | $ | 12,666.4 | |

| Net earnings (loss) | | $ | 402.1 | | | $ | (137.4 | ) | | $ | 1,131.5 | |

| Loss on early extinguishment of debt | | | 165.1 | | | | \- | | | | \- | |

The expected completion date of the spinoff is March 1, 2022.

Our Board of Directors has declared a pro rata dividend of 80.3% of the outstanding common stock of ZimVie to our stockholders of record as of the close of business on February 15, 2022.

As a result of the dividend, our stockholders will receive one share of ZimVie common stock for every ten shares of our common stock.

Immediately following the dividend, we will retain 19.7% of the outstanding shares of ZimVie common stock, which we intend to divest after the separation in a tax-efficient manner.

In December 2021, our management approved a new global restructuring program to reorganize our operations in preparation for the planned spinoff of ZimVie with an objective of reducing costs.

If a quantitative assessment is performed, the fair value of the reporting unit and the fair value of goodwill

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations.

federal, state and foreign jurisdictions.

Because income tax adjustments in certain jurisdictions can be significant, we record tax positions based upon our estimates.

For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements.

in the tax basis of goodwill, among other things.

We adopted this standard as of January 1, 2021.

The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows.

In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848).

ASU 2020-04 provides temporary optional guidance to ease the potential burden in accounting for reference rate reform.

The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met.

Early adoption of this ASU is permitted, and we may elect to apply the amendments prospectively through December 31, 2022.

In July 2021, the FASB issued ASU 2021-05 Lessors – Certain Leases with Variable Lease Payments which is an amendment to Accounting Standards Codification Topic 842 – Leases (“ASC 842”).

Under the current ASC 842 guidance, variable payments are excluded from the measurement of the initial net investment in the lease if the payments do not depend on an index or a rate.

For sales-type or direct financing leases, this could result in the recognition of a day-one loss for leases with entire or partial variable payments.

ASU 2021-05 requires lessors to classify leases with entire or partial variable payments as operating leases if otherwise a day-one loss would be recognized.

The ASU is effective for fiscal years beginning after December 15, 2021, and interim periods within those years.

Early adoption of this ASU is permitted.

The ASU can either be applied retrospectively to leases that were commenced or modified on or after the adoption of ASC 842 or applied prospectively to leases that commence or are modified after the adoption of ASU 2021-05.

We have not entered into leases that are comprised entirely of variable lease payments and therefore the adoption of this ASU will not have an impact on our financial statements.

| Knees | | $ | 2,647.9 | | | $ | 2,378.3 | | | $ | 2,780.6 | |

| S.E.T | | | 1,727.8 | | | | 1,525.6 | | | | 1,652.5 | |

| Spine & Dental | | | 1,008.8 | | | | 897.0 | | | | 1,021.8 | |

| --- | --- |

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and in evaluating management’s discounted cash flow analysis and significant assumptions, related to revenue growth rates and risk-adjusted discount rates.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

February 22, 2021

| Balance January 1, 2018 | | | 306.5 | | | $ | 3.1 | | | $ | 8,514.9 | | | $ | 10,022.8 | | | $ | (83.2 | ) | | | (103.9 | ) | | $ | (6,721.8 | ) | | $ | (0.3 | ) | | $ | 11,735.5 | |

| Net loss | | | \- | | | | \- | | | | \- | | | | (379.2 | ) | | | \- | | | | \- | | | | \- | | | | (0.1 | ) | | | (379.3 | ) |

| Other comprehensive loss | | | \- | | | | \- | | | | \- | | | | \- | | | | (61.3 | ) | | | \- | | | | \- | | | | \- | | | | (61.3 | ) |

| Adoption of new accounting standard | | | \- | | | | \- | | | | \- | | | | 42.9 | | | | (42.9 | ) | | | \- | | | | \- | | | | \- | | | | \- | |

| Sale of shares in a subsidiary without loss of control | | | \- | | | | \- | | | | \- | | | | \- | | | | \- | | | | \- | | | | \- | | | | 5.2 | | | | 5.2 | |

| Stock compensation plans | | | 1.4 | | | | \- | | | | 171.2 | | | | 0.2 | | | | \- | | | | \- | | | | 0.1 | | | | \- | | | | 171.5 | |

| acquired assets and liabilities | | | | | | | | | | | | |

| Proceeds from multicurrency revolving facility | | | \- | | | | \- | | | | 400.0 | |

| Payments on multicurrency revolving facility | | | \- | | | | \- | | | | (400.0 | ) |

Restructuring charges for the year ended December 31, 2018 were primarily attributable to project costs related to our supply chain optimization initiative.

Because income tax adjustments in certain jurisdictions can be significant, we record accruals representing management's best estimate of the probable resolution of these matters.

To the extent additional information becomes available, such accruals are adjusted to reflect the revised estimated probable outcome.

The standard becomes effective for us in the first quarter of 2021.

percent of our net sales in 2020.

The net sales by geography includes sales of all product categories including Dental which is included as a global business in the Americas and Global Businesses operating segment.

| Knees | | $ | 2,389.8 | | | $ | 2,810.1 | | | $ | 2,773.7 | |

| S.E.T | | | 1,322.0 | | | | 1,444.1 | | | | 1,401.2 | |

| Dental, Spine & CMFT | | | 1,043.7 | | | | 1,161.3 | | | | 1,175.1 | |

| Other | | | 518.5 | | | | 635.2 | | | | 664.0 | |

| | • | Dental products are combined with Spine and CMF (Craniomaxillofacial) products into one product category; |

| | • | Other immaterial adjustments related to brand alignment within product categories in the Asia Pacific region have been made |

| Outstanding at January 1, 2020 | | | 7,285 | | | $ | 107.53 | | | | | | | | | |

| Options granted | | | 1,370 | | | | 155.68 | | | | | | | | | |

| Options exercised | | | (1,028 | ) | | | 100.69 | | | | | | | | | |

| Options forfeited | | | (175 | ) | | | 135.54 | | | | | | | | | |

| Outstanding at December 31, 2020 | | | 7,423 | | | $ | 116.67 | | | | 6.3 | | | $ | 282.0 | |

| Vested or expected to vest as of December 31, 2020 | | | 7,205 | | | $ | 115.92 | | | | 6.2 | | | $ | 278.8 | |

| Exercisable at December 31, 2020 | | | 4,581 | | | $ | 104.20 | | | | 5.0 | | | $ | 228.5 | |

| Outstanding at January 1, 2020 | | | 1,228 | | | $ | 118.11 | |

| Granted | | | 446 | | | | 148.10 | |

| Vested | | | (281 | ) | | | 114.35 | |

| Forfeited | | | (323 | ) | | | 132.42 | |

| | | | 6,324.9 | | | | 5,916.8 | |

Our programs were executed on a revolving basis with a maximum funding limit of $450 million combined before termination.

At December 31, 2019, we had collected $54.6 million that were unremitted to the third party, which are reflected in our consolidated balance sheets under other current liabilities.

At December 31, 2019, the outstanding principal amount of receivables that had been derecognized under the U.S. and Japan revolving arrangements combined amounted to $270.2 million.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, [removed: 2020,] [added: 2021,] the end of the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2020.][added: 2021.]

Based on their assessment, management has concluded that, as of December 31, [removed: 2020,] [added: 2021,] the Company’s internal control over financial reporting is effective based on those criteria.

The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] as stated in its report which appears in Item 8 of this Annual Report on Form 10-K.

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, [removed: 2020] [added: 2021] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the quarter ended December 31, 2021, we continued to transition certain functions into our new Global Business Services (“GBS”) organization.

This is part of a multiyear plan to support our growth while simplifying and centralizing key global processes to harmonize and gain efficiencies in our processes and internal controls.

Although the underlying internal controls did not significantly change with this move, the responsibility to perform these internal controls has transferred to the new GBS centers as well as certain outsourced providers.

During the fourth quarter of [removed: 2020,] [added: 2021,] the Audit Committee of our Board of Directors approved the engagement of PricewaterhouseCoopers LLP, our independent registered public accounting firm, to perform certain non-audit services.

PART III

| --- | --- |

Not applicable.

PART III

Information required by this item is incorporated by reference from our definitive Proxy Statement for the annual meeting of stockholders to be held on May [removed: 14, 2021] [added: 13, 2022] (the [removed: “2021] [added: “2022] Proxy Statement”).

Information required by this item is incorporated by reference from our [removed: 2021] [added: 2022] Proxy Statement.

Information required by this item is incorporated by reference from our [removed: 2021] [added: 2022] Proxy Statement.

Information required by this item is incorporated by reference from our [removed: 2021] [added: 2022] Proxy Statement.

Information required by this item is incorporated by reference from our [removed: 2021] [added: 2022] Proxy Statement.

Consolidated Statements of Earnings for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

Consolidated Balance Sheets as of December 31, [removed: 2020] [added: 2021] and [removed: 2019][added: 2020]

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

Consolidated Statements of Cash Flows for the Years Ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018][added: 2019]

| Year Ended December 31, 2019 | | [added: $] | 65.7 | | | [added: $] | 5.5 | | | [added: $] | (5.3 | ) | | [added: $] | (0.9 | ) | | [added: $] | 65.0 | |

| Year Ended December 31, 2019 | | [added: $] | 390.9 | | | [added: $] | (6.6 | ) | | [added: $] | 165.7 | | (2) | [added: $] | (3.9 | ) | | [added: $] | 546.1 | |

| 3.1 | | [Restated Certificate of Incorporation of Zimmer Biomet Holdings, Inc., dated [removed: June 24, 2015] [added: May 17, 2021] (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed [removed: June 26, 2015)](http://www.sec.gov/Archives/edgar/data/1136869/000119312515237276/d948441dex32.htm)] [added: May 20, 2021)](http://www.sec.gov/Archives/edgar/data/1136869/000119312521167789/d568447dex32.htm)] |

| 3.2 | | [Restated [removed: By-Laws] [added: Bylaws] of Zimmer Biomet Holdings, [removed: Inc. dated February 19,] [added: Inc., effective May 17,] 2021 (incorporated by reference to Exhibit [removed: 3.1] [added: 3.3] to the Registrant’s Current Report on Form 8-K filed [removed: February 22, 2021)](http://www.sec.gov/Archives/edgar/data/1136869/000119312521049865/d104367dex31.htm)] [added: May 20, 2021)](http://www.sec.gov/Archives/edgar/data/1136869/000119312521167789/d568447dex33.htm)] |

| 4.1 | | [Description of Securities Registered under Section 12 of the Securities Exchange Act of [removed: 1934](https://www.sec.gov/Archives/edgar/data/1136869/000156459021007163/zbh-ex41_335.htm)] [added: 1934](https://www.sec.gov/Archives/edgar/data/1136869/000156459022007160/zbh-ex41_7.htm)] |

| [removed: 4.7] [added: 4.8] | | [Form of [removed: 3.375% Note] [added: 3.150% Notes] due [removed: 2021] [added: 2022] (incorporated by reference to Exhibit [removed: 4.6 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312511306336/d252786dex41.htm)] [added: 4.7 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312515098570/d894178dex41.htm)] |

| [removed: 4.8] [added: 4.7] | | [Third Supplemental Indenture, dated as of March 19, 2015, to the Indenture dated as of November 17, 2009 between Zimmer Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed March 19, 2015)](http://www.sec.gov/Archives/edgar/data/1136869/000119312515098570/d894178dex41.htm) |

| 4.9 | | [Form of [removed: 3.150%] [added: 3.550%] Notes due [removed: 2022] [added: 2025] (incorporated by reference to Exhibit [removed: 4.8] [added: 4.7] above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312515098570/d894178dex41.htm) |

| 4.10 | | [Form of [removed: 3.550%] [added: 4.250%] Notes due [removed: 2025] [added: 2035] (incorporated by reference to Exhibit [removed: 4.8] [added: 4.7] above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312515098570/d894178dex41.htm) |

| 4.11 | | [Form of [removed: 4.250%] [added: 4.450%] Notes due [removed: 2035] [added: 2045] (incorporated by reference to Exhibit [removed: 4.8] [added: 4.7] above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312515098570/d894178dex41.htm) |

| [removed: 4.12] [added: 4.13] | | [Form of [removed: 4.450%] [added: 1.414%] Notes due [removed: 2045] [added: 2022] (incorporated by reference to Exhibit [removed: 4.8 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312515098570/d894178dex41.htm)] [added: 4.12 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312516791951/d298678dex42.htm)] |

| [removed: 4.13] [added: 4.12] | | [Fourth Supplemental Indenture, dated as of December 13, 2016, between Zimmer Biomet Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed December 13, 2016)](http://www.sec.gov/Archives/edgar/data/1136869/000119312516791951/d298678dex42.htm) |

| 4.14 | | [Form of [removed: 1.414%] [added: 2.425%] Notes due [removed: 2022] [added: 2026] (incorporated by reference to Exhibit [removed: 4.13] [added: 4.12] above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312516791951/d298678dex42.htm) |

| [removed: 4.15] [added: 4.23] | | [Form of [removed: 2.425%] [added: 3.050%] Notes due 2026 (incorporated by reference to Exhibit [removed: 4.13 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312516791951/d298678dex42.htm)] [added: 4.22 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312520080651/d869142dex42.htm)] |

| [removed: 4.16] [added: 4.15] | | [Agency Agreement, dated as of December 13, 2016, by and among Zimmer Biomet Holdings, Inc., as issuer, Elavon Financial Services DAC, UK Branch, as paying agent, Elavon Financial Services DAC, as registrar and transfer agent, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed December 13, 2016)](http://www.sec.gov/Archives/edgar/data/1136869/000119312516791951/d298678dex43.htm) |

| [removed: 4.17] [added: 4.16] | | [Amendment No. 1, dated as of January 4, 2017, to the Agency Agreement dated as of December 13, 2016, by and among Zimmer Biomet Holdings, Inc., as issuer, Elavon Financial Services DAC, UK Branch, as paying agent, Elavon Financial Services DAC, as original registrar and original transfer agent, U.S. Bank National Association, as successor registrar and successor transfer agent, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A filed January 4, 2017)](http://www.sec.gov/Archives/edgar/data/1136869/000119312517001314/d306834dex44.htm) |

| [removed: 4.18] [added: 4.17] | | [Fifth Supplemental Indenture, dated as of March 19, 2018, between Zimmer Biomet Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed March 19, 2018)](http://www.sec.gov/Archives/edgar/data/1136869/000119312518087778/d657056dex42.htm) |

| [removed: 4.19] [added: 4.18] | | [Form of [removed: Floating Rate] [added: 3.700%] Notes due [removed: 2021] [added: 2023] (incorporated by reference to Exhibit [removed: 4.18] [added: 4.17] above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312518087778/d657056dex42.htm) |

| 4.20 | | [Form of [removed: 3.700%] [added: 1.164%] Notes due [removed: 2023] [added: 2027] (incorporated by reference to Exhibit [removed: 4.18 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312518087778/d657056dex42.htm)] [added: 4.19 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312519293426/d796220dex42.htm)] |

| [removed: 4.21] [added: 4.19] | | [Sixth Supplemental Indenture, dated as of November 15, 2019, between Zimmer Biomet Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed November 15, 2019)](http://www.sec.gov/Archives/edgar/data/1136869/000119312519293426/d796220dex42.htm) |

| [removed: 4.22] [added: 4.24] | | [Form of [removed: 1.164%] [added: 3.550%] Notes due [removed: 2027] [added: 2030] (incorporated by reference to Exhibit [removed: 4.21 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312519293426/d796220dex42.htm)] [added: 4.22 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312520080651/d869142dex42.htm)] |

| [removed: 4.23] [added: 4.21] | | [Agency Agreement, dated as of November 15, 2019, by and between Zimmer Biomet Holdings, Inc., as issuer, Elavon Financial Services DAC, UK Branch, as paying agent, U.S. Bank National Association, as transfer agent and registrar, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed on November 15, 2019)](http://www.sec.gov/Archives/edgar/data/1136869/000119312519293426/d796220dex43.htm) |

| [removed: 4.24] [added: 4.22] | | [Seventh Supplemental Indenture, dated as of March 20, 2020, between Zimmer Biomet Holdings, Inc. and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed March 20, 2020](http://www.sec.gov/Archives/edgar/data/1136869/000119312520080651/d869142dex42.htm)) |

| [removed: 4.25] [added: 4.26] | | [Form of [removed: 3.050%] [added: 1.450%] Notes due [removed: 2026] [added: 2024] (incorporated by reference to Exhibit [removed: 4.24 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312520080651/d869142dex42.htm)] [added: 4.25 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312521340365/d226882dex42.htm)] |

| [removed: 4.26] [added: 4.27] | | [Form of [removed: 3.550%] [added: 2.600%] Notes due [removed: 2030] [added: 2031] (incorporated by reference to Exhibit [removed: 4.24 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312520080651/d869142dex42.htm)] [added: 4.25 above)](http://www.sec.gov/Archives/edgar/data/1136869/000119312521340365/d226882dex42.htm)] |

| 10.12* | | [Form of Change in Control Severance Agreement with Ivan Tornos, Suketu Upadhyay, Rachel Ellingson and [removed: Carrie Nichol] [added: Lori Winkler] (incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed February 26, 2019)](http://www.sec.gov/Archives/edgar/data/1136869/000156459019004283/zbh-ex1011_350.htm) |

| [removed: 10.13*] [added: 10.14*] | | [Form of Confidentiality, Non-Competition and Non-Solicitation Agreement with Ivan Tornos, Suketu Upadhyay, Rachel Ellingson and [removed: Carrie Nichol] [added: Lori Winkler] (incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed February 26, 2019)](http://www.sec.gov/Archives/edgar/data/1136869/000156459019004283/zbh-ex1012_349.htm) |

| [removed: 10.14*] [added: 10.15*] | | [Swiss Employment Agreement by and between Zimmer GmbH and [removed: Didier Deltort] [added: Wilfred van Zuilen] dated as of [removed: June 28, 2018] [added: May 5, 2021] (incorporated by reference to Exhibit [removed: 10.1] [added: 10.4] to the Quarterly Report on Form 10-Q filed [removed: November 1, 2018)](http://www.sec.gov/Archives/edgar/data/1136869/000156459018026081/zbh-ex101_62.htm)] [added: August 3, 2021)](http://www.sec.gov/Archives/edgar/data/1136869/000156459021040242/zbh-ex104_152.htm)] |

| [removed: 10.15*] [added: 10.19*] | | [Offer Letter [removed: by and] between Zimmer Biomet Holdings, Inc. and [removed: Didier Deltort] [added: Suketu Upadhyay] dated [removed: as of] June [removed: 28, 2018] [added: 13, 2019] (incorporated by reference to Exhibit [removed: 10.2] [added: 10.1] to the [removed: Quarterly] [added: Registrant’s Current] Report on Form [removed: 10-Q] [added: 8-K] filed [removed: November 1, 2018)](http://www.sec.gov/Archives/edgar/data/1136869/000156459018026081/zbh-ex102_64.htm)] [added: June 19, 2019)](http://www.sec.gov/Archives/edgar/data/1136869/000119312519176552/d769142dex101.htm)] |

| [removed: 10.16*] [added: 10.17*] | | [Change in Control Severance Agreement by and between Zimmer GmbH and [removed: Didier Deltort dated as of October 9, 2018] [added: Wilfred van Zuilen] (incorporated by reference to Exhibit [removed: 10.4] [added: 10.6] to the Quarterly Report on Form 10-Q filed [removed: November 1, 2018)](http://www.sec.gov/Archives/edgar/data/1136869/000156459018026081/zbh-ex104_244.htm)] [added: August 3, 2021)](http://www.sec.gov/Archives/edgar/data/1136869/000156459021040242/zbh-ex106_151.htm)] |

| [removed: 10.17*] [added: 10.18*] | | [Confidentiality, Non-Competition and Non-Solicitation Agreement by and between Zimmer GmbH and [removed: Didier Deltort dated as of June 28, 2018] [added: Wilfred van Zuilen] (incorporated by reference to Exhibit [removed: 10.3] [added: 10.7] to the Quarterly Report on Form 10-Q filed [removed: November 1, 2018)](http://www.sec.gov/Archives/edgar/data/1136869/000156459018026081/zbh-ex103_63.htm)] [added: August 3, 2021)](http://www.sec.gov/Archives/edgar/data/1136869/000156459021040242/zbh-ex107_150.htm)] |

| [removed: 10.18*] [added: 10.16*] | | [Offer Letter [added: by and] between Zimmer Biomet Holdings, Inc. and [removed: Suketu Upadhyay] [added: Wilfred van Zuilen] dated [removed: June 13, 2019] [added: as of May 5, 2021] (incorporated by reference to Exhibit [removed: 10.1] [added: 10.5] to the [removed: Registrant’s Current] [added: Quarterly] Report on Form [removed: 8-K] [added: 10-Q] filed [removed: June 19, 2019)](http://www.sec.gov/Archives/edgar/data/1136869/000119312519176552/d769142dex101.htm)] [added: August 3, 2021)](http://www.sec.gov/Archives/edgar/data/1136869/000156459021040242/zbh-ex105_153.htm)] |

| [removed: 10.19*] [added: 10.20*] | | [Letter of Appointment by and between Zimmer Asia (HK) Limited and Sang Yi dated June 15, 2020 (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q filed August 5, 2020)](http://www.sec.gov/Archives/edgar/data/1136869/000156459020036314/zbh-ex107_159.htm) |

| [removed: 10.20*] [added: 10.21*] | | [Change in Control Severance Agreement with Sang Yi dated June 15, 2020 (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q filed August 5, 2020)](http://www.sec.gov/Archives/edgar/data/1136869/000156459020036314/zbh-ex106_158.htm) |

| [removed: 10.21*] [added: 10.22*] | | [Confidentiality, Non-Competition and Non-Solicitation Agreement with Sang Yi dated June 15, 2020 (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q filed August 5, 2020)](http://www.sec.gov/Archives/edgar/data/1136869/000156459020036314/zbh-ex105_160.htm) |

| Year Ended December 31, 2021 | | | 75.8 | | | | 15.1 | | | | (14.2 | ) | | | (2.1 | ) | | | 74.6 | |

| Year Ended December 31, 2021 | | | 542.1 | | | | (4.4 | ) | | | (64.0 | ) | (2) | | (3.6 | ) | | | 470.1 | |

| 10.13* | | [Change in Control Severance Agreement with Derek Davis (incorporated by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed February 27, 2009)](http://www.sec.gov/Archives/edgar/data/1136869/000095015209001918/c48761exv10w14.htm) |

| 10.34* | | [Form of Nonqualified Stock Option Award Agreement (three-year vesting) under the Zimmer Biomet Holdings, Inc. 2009 Stock Incentive Plan](https://www.sec.gov/Archives/edgar/data/1136869/000156459022007160/zbh-ex1034_375.htm) |

| 10.38* | | [Form of Performance-Based Restricted Stock Unit Award Agreement (2022) under the Zimmer Biomet Holdings, Inc. 2009 Stock Incentive Plan](https://www.sec.gov/Archives/edgar/data/1136869/000156459022007160/zbh-ex1038_374.htm) |

| 10.40* | | [Form of Restricted Stock Unit Award Agreement (three-year vesting) under the Zimmer Biomet Holdings, Inc. 2009 Stock Incentive Plan](https://www.sec.gov/Archives/edgar/data/1136869/000156459022007160/zbh-ex1040_373.htm) |

| Year Ended December 31, 2018 | | $ | 60.2 | | | $ | 10.7 | | | $ | (3.6 | ) | | $ | (1.6 | ) | | $ | 65.7 | |

| Year Ended December 31, 2018 | | $ | 140.6 | | | $ | 48.2 | | | $ | 206.2 | | (2) | $ | (4.1 | ) | | $ | 390.9 | |

| Dated: February [removed: 22, 2021] [added: 25, 2022] | | | | Bryan Hanson |

| | | | | [added: Chairman,] President and Chief Executive Officer |

| /s/ Bryan Hanson | | [removed: President,] [added: Chairman, President and] Chief Executive Officer [removed: and Director] | | February [removed: 22, 2021] [added: 25, 2022] | |

| /s/ Suketu Upadhyay | | Executive Vice President and Chief Financial Officer | | February [removed: 22, 2021] [added: 25, 2022] | |

| /s/ [removed: Carrie Nichol] [added: Derek Davis] | | Vice President, [added: Interim] Controller and Chief Accounting [removed: Officer] | | February [removed: 22, 2021] [added: 25, 2022] | |

| [removed: Carrie Nichol] [added: Derek Davis] | | [added: Officer] (Principal Accounting Officer) | | | |

| /s/ Christopher Begley | | Director | | February [removed: 22, 2021] [added: 25, 2022] | |

| /s/ Betsy Bernard | | Director | | February [removed: 22, 2021] [added: 25, 2022] | |

| /s/ Michael Farrell | | Director | | February [removed: 22, 2021] [added: 25, 2022] | |

| /s/ Robert Hagemann | | Director | | February [removed: 22, 2021] [added: 25, 2022] | |

| /s/ Arthur Higgins | | Director | | February [removed: 22, 2021] [added: 25, 2022] | |

| /s/ Maria Teresa Hilado | | Director | | February [removed: 22, 2021] [added: 25, 2022] | |

| /s/ Syed Jafry | | Director | | February [removed: 22, 2021] [added: 25, 2022] | |

| /s/ Michael Michelson | | Director | | February [removed: 22, 2021] [added: 25, 2022] | |

| /s/ Sreelakshmi Kolli | | Director | | February 25, 2022 | |

| | | | | | |

| | | | | | |

| | | | | | |

| | | | | | |

| /s/ Gail Boudreaux | | Director | | February 22, 2021 | |

| Gail Boudreaux | | | | | |

| /s/ Larry Glasscock | | Director | | February 22, 2021 | |

| Larry Glasscock | | | | | |

| | | Director | | February 22, 2021 | |