Segment Data

12 Months Ended

Dec. 31, 2011

Segment Data [Abstract]

Segment Data

17. SEGMENT DATA

We design, develop, manufacture and market orthopaedic reconstructive implants, biologics, dental implants, spinal implants, trauma products and related surgical products which include surgical supplies and instruments designed to aid in surgical procedures and post-operation rehabilitation. We also provide other healthcare-related services. Revenue related to these services currently represents less than 1 percent of our total net sales. We manage operations through three major geographic segments – the Americas, which is comprised principally of the U.S. and includes other North, Central and South American markets; Europe, which is comprised principally of Europe and includes the Middle East and African markets; and Asia Pacific, which is comprised primarily of Japan and includes other Asian and Pacific markets. This structure is the basis for our reportable segment information discussed below. Management evaluates reportable segment performance based upon segment operating profit exclusive of operating expenses pertaining to share-based payment expense, inventory step-up, “Certain claims”, goodwill impairment, “Special items”, net curtailment and settlement and global operations and corporate functions. Global operations and corporate functions include research, development engineering, medical education, brand management, corporate legal, finance, and human resource functions, U.S., Puerto Rico and Ireland-based manufacturing operations and logistics and intangible asset amortization resulting from business combination accounting. Intercompany transactions have been eliminated from segment operating profit. Management reviews accounts receivable, inventory, property, plant and equipment, goodwill and intangible assets by reportable segment exclusive of U.S., Puerto Rico and Ireland-based manufacturing operations and logistics and corporate assets.

ZIMMER HOLDINGS, INC. 2011 FORM 10-K ANNUAL REPORT

Notes to Consolidated Financial Statements (Continued)

Net sales and other information by segment is as follows (in millions):

	Americas		Europe		Asia Pacific		Global Operations and Corporate Functions			Total
As of and for the Year Ended December 31, 2011
Net sales	$	2,440.8	$	1,214.5	$	796.5	$	–		$	4,451.8
Depreciation and amortization		81.0		74.9		36.3		167.7			359.9
Segment operating profit		1,220.4		414.7		290.6		(596.7	)		1,329.0
Share-based payment expense											(60.5	)
Inventory step-up											(11.4	)
Certain claims											(157.8	)
Special items											(75.2	)
Operating profit											1,024.1
Long-lived assets		769.0		330.6		107.7		–			1,207.3
Total assets		2,571.6		2,345.5		602.4		2,995.8			8,515.3
Additions to instruments		–		15.2		7.7		132.5			155.4
Additions to other property, plant and equipment		1.3		23.8		4.7		84.0			113.8
As of and for the Year Ended December 31, 2010
Net sales	$	2,431.6	$	1,099.5	$	689.1	$	–		$	4,220.2
Depreciation and amortization		78.1		70.5		30.0		161.6			340.2
Segment operating profit		1,214.6		398.0		259.9		(578.7	)		1,293.8
Share-based payment expense											(62.0	)
Inventory step-up											(1.4	)
Certain claims											(75.0	)
Goodwill impairment											(204.0	)
Special items											(34.7	)
Operating profit											916.7
Long-lived assets		841.5		281.7		90.6		–			1,213.8
Total assets		2,578.0		2,210.8		561.4		2,649.7			7,999.9
Additions to instruments		–		22.9		5.2		164.4			192.5
Additions to other property, plant and equipment		0.3		16.9		7.6		54.4			79.2
As of and for the Year Ended December 31, 2009
Net sales	$	2,372.4	$	1,119.2	$	603.8	$	–		$	4,095.4
Depreciation and amortization		86.4		64.8		26.7		159.5			337.4
Segment operating profit		1,168.7		436.8		257.4		(605.1	)		1,257.8
Share-based payment expense											(75.3	)
Inventory step-up											(12.5	)
Certain claims											(35.0	)
Goodwill impairment											(73.0	)
Special items											(75.3	)
Net curtailment and settlement											32.1
Operating profit											1,018.8
Long-lived assets		851.0		285.0		85.7		–			1,221.7
Total assets		3,022.4		2,273.6		443.6		2,045.9			7,785.5
Additions to instruments		–		17.0		5.3		101.4			123.7
Additions to other property, plant and equipment		0.6		28.8		5.1		70.6			105.1

ZIMMER HOLDINGS, INC. 2011 FORM 10-K ANNUAL REPORT

Notes to Consolidated Financial Statements (Continued)

The Americas long-lived tangible assets are located primarily in the U.S. $233.2 million of Europe long-lived tangible assets as of December 31, 2011 are located in Switzerland.

For segment reporting purposes, deployed instruments are included in the measurement of reportable segment assets while undeployed instruments at U.S., Puerto Rico and Ireland-based manufacturing operations and logistics are included in global operations and corporate functions. The majority of instruments are purchased by U.S., Puerto Rico and Ireland-based manufacturing operations and logistics and are deployed to the reportable segments as needed for the business. Therefore, the reportable segment assets include deployed instruments even though that reportable segment may not report the instrument addition.

U.S. sales were $2,263.7 million, $2,277.2 million and $2,237.5 million for the years ended December 31, 2011, 2010 and 2009, respectively. Sales within any other individual country were less than 10 percent of our consolidated sales. Sales are attributable to a country based upon the customer’s country of domicile.

Net sales by product category are as follows (in millions):

For the Years Ended December 31,	2011		2010		2009
Reconstructive
Knees	$	1,825.1	$	1,789.9	$	1,756.3
Hips		1,355.6		1,262.3		1,228.5
Extremities		163.4		150.1		135.6
Total		3,344.1		3,202.3		3,120.4
Dental		248.1		219.0		204.7
Trauma		285.8		245.5		234.8
Spine		225.0		234.4		253.6
Surgical and other		348.8		319.0		281.9
Total	$	4,451.8	$	4,220.2	$	4,095.4