Segment Information

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Information

15. Segment Information

We design, develop, manufacture and market orthopaedic reconstructive products; sports medicine, biologics, extremities and trauma products; spine, bone healing, craniomaxillofacial and thoracic products, dental implants; and related surgical products. We also provide other healthcare-related services. 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; EMEA, 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 inventory step-up and certain other inventory and manufacturing related charges, “Certain claims,” goodwill impairment, intangible asset amortization, “Special items,” 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 share-based payment expense. Due to the short period of time that Biomet’s results were included in our consolidated results for the three and six month periods ended June 30, 2015, the operating results of Biomet were included as part of global operations and corporate functions and not as part of management’s reportable segment results. We anticipate that in future quarters, Biomet’s results will be combined with Zimmer’s results in our reportable segment reporting. Intercompany transactions have been eliminated from segment operating profit.

Net sales and segment operating profit are as follows (in millions):

	Net Sales				Operating Profit
	Three Months Ended June 30,				Three Months Ended June 30,
	2015		2014		2015			2014
Zimmer
Americas	$	638.1	$	639.7	$	324.3		$	317.7
EMEA		277.0		334.7		101.2			110.4
Asia Pacific		192.6		208.5		96.8			90.0
Biomet		59.9		—		—			—
Zimmer Biomet	$	1,167.6	$	1,182.9
Inventory step-up and certain other inventory and manufacturing related charges						(14.7	)		(13.5	)
Certain claims						(7.7	)		(21.8	)
Special items						(469.4	)		(62.3	)
Global operations, corporate functions and Biomet						(160.0	)		(159.6	)
Operating profit					$	(129.5	)	$	260.9

	Net Sales				Operating Profit
	Six Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015			2014
Zimmer
Americas	$	1,283.3	$	1,278.4	$	644.6		$	629.8
EMEA		575.9		661.6		211.6			220.3
Asia Pacific		382.9		404.4		192.8			181.6
Biomet		59.9		—
Zimmer Biomet	$	2,302.0	$	2,344.4
Inventory step-up and certain other inventory and manufacturing related charges						(18.6	)		(25.2	)
Certain claims						(7.7	)		(21.8	)
Special items						(556.4	)		(98.9	)
Global operations, corporate functions and Biomet						(320.9	)		(324.8	)
Operating profit					$	145.4		$	561.0

Starting in 2015, we have removed intangible asset amortization from our reportable segment operating profit. In prior years, intangible asset amortization resulting from business combination accounting was presented in global operations and corporate functions while intangible asset amortization resulting from other intangible assets was reported in the reportable segment operating profit. The 2014 presentation has been reclassified to conform to the 2015 presentation.

Due to the change in our interim quarter-end closing convention for the majority of our international subsidiaries, net sales for our EMEA and Asia Pacific operating segments in the three and six month periods ended June 30, 2015 include sales through June 30, 2015, whereas in the three and six month periods ended June 30, 2014, net sales for those operating segments included sales through June 25, 2014. We have not restated the presentation of the 2014 financial statements to conform to this change of closing convention because the impact of the change is not material to our consolidated results of operations or to the comparisons between the 2015 and 2014 periods.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Zimmer
Reconstructive
Knees	$	475.8	$	497.9	$	963.1	$	985.8
Hips		307.4		341.0		619.6		672.7
Extremities		48.5		51.5		100.7		103.6
		831.7		890.4		1,683.4		1,762.1
Dental		56.8		61.1		112.6		122.1
Trauma		72.6		78.8		152.0		158.5
Spine		52.2		52.2		101.7		100.5
Surgical and other		94.4		100.4		192.4		201.2
Total Zimmer		1,107.7		1,182.9		2,242.1		2,344.4
Biomet		59.9		—		59.9		—
Zimmer Biomet	$	1,167.6	$	1,182.9	$	2,302.0	$	2,344.4