EX-99.1 2 zbh-ex991_6.htm EX-99.1 zbh-ex991_6.htm

 

 

 

 

 

 

 

 

 

345 E. Main St.

 

Warsaw, IN 46580

 

www.zimmerbiomet.com

Exhibit 99.1

 

 

Media

Investors

Meredith Weissman

Keri Mattox

(703) 346-3127

(215) 275-2431

meredith.weissman@zimmerbiomet.com

keri.mattox@zimmerbiomet.com

 

 

 

Ezgi Yagci

 

(617) 549-2443

 

ezgi.yagci@zimmerbiomet.com

 

Zimmer Biomet Announces Third Quarter 2021 Financial Results

 

•

Third quarter net sales of $1.924 billion decreased 0.3% and 0.8% on a constant currency1 basis

 

•

Third quarter diluted earnings per share were $0.69; adjusted1 diluted earnings per share were $1.81

 

•

Company updates 2021 financial guidance, reducing and narrowing range for full year outlook

(WARSAW, IN) November 4, 2021 — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended September 30, 2021.  The Company reported third quarter net sales of $1.924 billion, a decrease of 0.3% from the prior year period, and a decrease of 0.8% on a constant currency basis.  Third quarter 2021 net sales increased 1.7% when compared to the pre-pandemic third quarter 2019, and increased 0.4% on a constant currency basis. Net earnings for the third quarter of 2021 were $145.6 million, or $381.2 million on an adjusted basis.

Diluted earnings per share were $0.69 for the third quarter, and adjusted diluted earnings per share were $1.81.

 

1 

Reconciliations of these measures to the corresponding U.S. generally accepted accounting principles measures are included in this press release.

Page 1 of 27

 

 

“Despite the continued challenges and market pressures in the third quarter, we drove significant progress in the advancement of our business priorities and continued focus on execution to create value and deliver on our mission," said Bryan Hanson, Chairman, President and CEO of Zimmer Biomet. "Our underlying business remains strong, fueled by our transformation and the launch of new innovative products that can make a difference for our customers and for patients. I continue to be incredibly proud of our team for their dedication, resilience and performance during this challenging time."

Please see the attached schedules accompanying this press release for additional details on performance in the quarter, including sales by Zimmer Biomet’s three geographies and five product categories.

Recent Highlights

Aligned with the ongoing transformation of Zimmer Biomet’s business, key third quarter highlights include the following updates related to ZBEdge, Zimmer Biomet's suite of integrated digital and robotic technologies engineered to deliver data-powered clinical insights, shared seamlessly across the patient journey, and with the goal of improving patient outcomes:

•

U.S. Food and Drug Administration (FDA) De Novo classification grant and authorization to market the tibial extension for Persona IQ®, the world's first and only smart knee cleared by the FDA for total knee replacement surgery. Persona IQ combines Zimmer Biomet's proven and trusted knee implant, Persona® The Personalized Knee®, with Canary Medical's proprietary implantable canturioTMte tibial extension sensor technology that measures and determines range of motion, step count, walking speed and other gait metrics.

•

FDA 510(k) clearance of the ROSA® Hip System for robotically-assisted direct anterior total hip replacement. ROSA Hip is the fourth robotic system introduced by Zimmer Biomet and adds to the Company's comprehensive ROSA Robotics portfolio, which includes the ROSA Knee System for total knee arthroplasty, ROSA Partial Knee System for partial knee arthroplasty and ROSA ONE® for neurosurgical and spine procedures.

•

Four data presentations on the clinical value of mymobility® with Apple Watch® at the American Academy of Orthopaedic Surgeons (AAOS) 2021 Annual Meeting. mymobility with Apple Watch is a first-of-a-kind remote care management platform designed to help healthcare professionals remotely support and guide patients as they prepare for and recover from orthopedic procedures.

 

 

 

 

 

Page 2 of 27

 

 

Geographic and Product Category Sales

 

The following sales tables provide results by geography and product category for the three and nine-month periods ended September 30, 2021, as well as the percentage change compared to the prior year period, on both a reported basis and a constant currency basis.

NET SALES - THREE MONTHS ENDED SEPTEMBER 30, 2021

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant

 

 

 

Net

 

 

 

 

 

 

 

Currency

 

 

 

Sales

 

 

% Change

 

 

 

% Change

 

 

Geographic Results

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

1,180.5

 

 

 

(3.0

)

%

 

 

(3.2

)

%

EMEA

 

393.1

 

 

 

7.4

 

 

 

 

5.9

 

 

Asia Pacific

 

350.4

 

 

 

1.1

 

 

 

 

0.5

 

 

Total

$

1,924.0

 

 

 

(0.3

)

%

 

 

(0.8

)

%

Product Categories

 

 

 

 

 

 

 

 

 

 

 

 

 

Knees

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

386.3

 

 

 

(3.5

)

%

 

 

(3.8

)

%

EMEA

 

135.2

 

 

 

7.1

 

 

 

 

5.8

 

 

Asia Pacific

 

126.4

 

 

 

3.8

 

 

 

 

2.4

 

 

Total

 

647.9

 

 

 

(0.1

)

 

 

 

(0.7

)

 

Hips

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

244.2

 

 

 

(9.1

)

 

 

 

(9.4

)

 

EMEA

 

119.0

 

 

 

8.6

 

 

 

 

7.3

 

 

Asia Pacific

 

90.6

 

 

 

(14.4

)

 

 

 

(13.8

)

 

Total

 

453.8

 

 

 

(6.3

)

 

 

 

(6.6

)

 

S.E.T. *

 

437.6

 

 

 

4.9

 

 

 

 

4.2

 

 

Dental & Spine

 

238.6

 

 

 

(5.8

)

 

 

 

(6.1

)

 

Other

 

146.1

 

 

 

15.7

 

 

 

 

15.4

 

 

Total

$

1,924.0

 

 

 

(0.3

)

%

 

 

(0.8

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic

 

 

 

 


Page 3 of 27

 

 

NET SALES - NINE MONTHS ENDED SEPTEMBER 30, 2021

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant

 

 

 

Net

 

 

 

 

 

 

Currency

 

 

 

Sales

 

 

% Change

 

 

% Change

 

 

Geographic Results

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

3,535.1

 

 

 

15.8

 

%

 

15.5

 

%

EMEA

 

1,207.1

 

 

 

22.8

 

 

 

16.0

 

 

Asia Pacific

 

1,056.1

 

 

 

16.7

 

 

 

12.4

 

 

Total

$

5,798.3

 

 

 

17.4

 

%

 

15.0

 

%

Product Categories

 

 

 

 

 

 

 

 

 

 

 

 

Knees

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

1,145.4

 

 

 

14.6

 

%

 

14.3

 

%

EMEA

 

415.1

 

 

 

20.6

 

 

 

14.2

 

 

Asia Pacific

 

367.3

 

 

 

19.0

 

 

 

13.7

 

 

Total

 

1,927.8

 

 

 

16.7

 

 

 

14.1

 

 

Hips

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

737.5

 

 

 

9.8

 

 

 

9.3

 

 

EMEA

 

349.2

 

 

 

19.7

 

 

 

13.4

 

 

Asia Pacific

 

288.7

 

 

 

2.1

 

 

 

(0.4

)

 

Total

 

1,375.4

 

 

 

10.3

 

 

 

8.1

 

 

S.E.T. *

 

1,317.3

 

 

 

20.8

 

 

 

18.3

 

 

Dental & Spine

 

748.1

 

 

 

19.7

 

 

 

17.8

 

 

Other

 

429.7

 

 

 

32.3

 

 

 

29.9

 

 

Total

$

5,798.3

 

 

 

17.4

 

%

 

15.0

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic

 

 

 

 

 

 

Financial Guidance

The Company is updating its full-year 2021 financial guidance to reduce and narrow its previous projected ranges for revenue growth, adjusted operating profit margin and adjusted diluted EPS:

Projected Year Ending December 31, 2021

 

Previous Guidance

 

Updated Guidance

2021 reported revenue growth

14.5% - 16.5%

 

11.3% - 12.5%

Foreign Currency Exchange Impact

1.5%

 

1.4%

Adjusted Operating Profit Margin(1)

26.5% - 27.0%

 

26.0% - 26.5%

Adjusted Tax Rate(1)

16.0% - 16.5%

 

16.0% - 16.5%

Adjusted Diluted EPS(1)

$7.65 - $7.95

 

$7.32 - $7.47

 

 

Page 4 of 27

 

 

(1)

These measures are non-GAAP financial measures for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. See “Forward-Looking Non-GAAP Financial Measures.”

 

 

 

Conference Call

The Company will conduct its third quarter investor conference call today, November 4, 2021, at 8:30 a.m. ET.  The audio webcast can be accessed via Zimmer Biomet's Investor Relations website at https://investor.zimmerbiomet.com.  It will be archived for replay following the conference call.  

About the Company

Zimmer Biomet is a global medical technology leader with a comprehensive portfolio designed to maximize mobility and improve health. We seamlessly transform the patient experience through our innovative products and suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence.  

With 90+ years of trusted leadership and proven expertise, Zimmer Biomet is positioned to deliver the highest quality solutions to patients and providers. Our legacy continues to come to life today through our progressive culture of evolution and innovation.

For more information about our product portfolio, our operations in 25+ countries and sales in 100+ countries or about joining our team, visit www.zimmerbiomet.com or follow Zimmer Biomet on Twitter at www.twitter.com/zimmerbiomet.   

Website Information

We routinely post important information for investors on our website, www.zimmerbiomet.com, in the “Investor Relations” section.  We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD.  Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts.  The information contained on, or that may be accessed through, our website or any other website referenced herein is not incorporated by reference into, and is not a part of, this document.

Note on Non-GAAP Financial Measures

This press release includes non-GAAP financial measures that differ from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”).  These non-

Page 5 of 27

 

GAAP financial measures may not be comparable to similar measures reported by other companies and should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP.

Sales change information for the three and nine-month periods ended September 30, 2021 is presented on a GAAP (reported) basis and on a constant currency basis.  Constant currency percentage changes exclude the effects of foreign currency exchange rates.  They are calculated by translating current and prior-period sales at the same predetermined exchange rate.  The translated results are then used to determine year-over-year percentage increases or decreases.  

Net earnings and diluted earnings per share for the three and nine-month periods ended September 30, 2021 are presented on a GAAP (reported) basis and on an adjusted basis.  Adjusted earnings and adjusted diluted earnings per share exclude the effects of certain items, which are detailed in the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures presented later in this press release.  

Free cash flow is an additional non-GAAP measure that is presented in this press release.  Free cash flow is computed by deducting additions to instruments and other property, plant and equipment from net cash provided by operating activities.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this press release.  This press release also contains supplemental reconciliations of additional non-GAAP financial measures that the Company presents in other contexts.  These additional non-GAAP financial measures are computed from the most directly comparable GAAP financial measure as indicated in the applicable reconciliation.

Management uses non-GAAP financial measures internally to evaluate the performance of the business.  Additionally, management believes these non-GAAP measures provide meaningful incremental information to investors to consider when evaluating the performance of the Company.  Management believes these measures offer the ability to make period-to-period comparisons that are not impacted by certain items that can cause dramatic changes in reported income but that do not impact the fundamentals of our operations.  The non-GAAP measures enable the evaluation of operating results and trend analysis by allowing a reader to better identify operating trends that may otherwise be masked or distorted by these types of items that are excluded from the non-GAAP measures.  In addition, constant currency sales changes, adjusted operating profit, adjusted diluted earnings per share and free cash flow are used as performance metrics in our incentive compensation programs.

 

 

Page 6 of 27

 

 

Forward-Looking Non-GAAP Financial Measures

This press release also includes certain forward-looking non-GAAP financial measures for the year ending December 31, 2021.  We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures.  For instance, we exclude the impact of certain charges related to initial compliance with the European Union Medical Device Regulation; restructuring and other cost reduction initiatives; quality remediation; acquisition, integration, divestiture and related; and certain legal and tax matters.  We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts.  For example, the timing of certain transactions is difficult to predict because management's plans may change.  In addition, the company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors.  It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding financial guidance, the impact of the COVID-19 pandemic on our business, including any continued recovery, and any statements about our forecasts, expectations, plans, intentions, strategies or prospects.  All statements other than statements of historical or current fact are, or may be deemed to be, forward-looking statements.  Such statements are based upon the current beliefs, expectations and assumptions of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual outcomes and results to differ materially from the forward-looking statements.  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 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,

Page 7 of 27

 

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; 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; and the impact of the ongoing financial and political uncertainty on countries in EMEA on the ability to collect accounts receivable in affected countries.  A further list and description of these risks and uncertainties and other factors can be found in our Annual Report on Form 10-K for the year ended December 31, 2020,

Page 8 of 27

 

including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and our subsequent filings with the Securities and Exchange Commission (SEC).  Copies of these filings are available online at www.sec.gov, www.zimmerbiomet.com or on request from us.  These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC.  Forward-looking statements speak only as of the date they are made, and we expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Readers of this press release are cautioned not to rely on these forward-looking statements since there can be no assurance that these forward-looking statements will prove to be accurate.  This cautionary note is applicable to all forward-looking statements contained in this press release.

 

###


Page 9 of 27

 

 

 

ZIMMER BIOMET HOLDINGS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

 

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

 

(in millions, except per share amounts, unaudited)

 

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

Net Sales

$

1,924.0

 

 

$

1,929.3

 

Cost of products sold, excluding intangible asset amortization

 

581.5

 

 

 

569.4

 

Intangible asset amortization

 

153.7

 

 

 

149.7

 

Research and development

 

108.9

 

 

 

85.9

 

Selling, general and administrative

 

802.4

 

 

 

790.0

 

Restructuring and other cost reduction initiatives

 

23.5

 

 

 

16.2

 

Quality remediation

 

11.8

 

 

 

9.8

 

Acquisition, integration, divestiture and related

 

27.3

 

 

 

9.1

 

Operating expenses

 

1,709.1

 

 

 

1,630.1

 

Operating Profit

 

214.9

 

 

 

299.2

 

Other income, net

 

0.3

 

 

 

10.6

 

Interest expense, net

 

(52.6

)

 

 

(54.0

)

Earnings before income taxes

 

162.6

 

 

 

255.8

 

Provision for income taxes

 

16.8

 

 

 

9.7

 

Net Earnings

 

145.8

 

 

 

246.1

 

Less: Net earnings attributable to noncontrolling interest

 

0.2

 

 

 

3.6

 

Net Earnings of Zimmer Biomet Holdings, Inc.

$

145.6

 

 

$

242.5

 

Earnings Per Common Share

 

 

 

 

 

 

 

Basic

$

0.70

 

 

$

1.17

 

Diluted

$

0.69

 

 

$

1.16

 

Weighted Average Common Shares Outstanding

 

 

 

 

 

 

 

Basic

 

208.8

 

 

 

207.1

 

Diluted

 

210.6

 

 

 

208.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Page 10 of 27

 

 

 

ZIMMER BIOMET HOLDINGS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

 

(in millions, except per share amounts, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

 

 

2020

 

Net Sales

$

5,798.3

 

 

 

 

$

4,939.2

 

Cost of products sold, excluding intangible asset amortization

 

1,679.5

 

 

 

 

 

1,481.0

 

Intangible asset amortization

 

463.8

 

 

 

 

 

445.0

 

Research and development

 

383.8

 

 

 

 

 

272.0

 

Selling, general and administrative

 

2,389.9

 

 

 

 

 

2,283.9

 

Goodwill and intangible asset impairment

 

16.3

 

 

 

 

 

645.0

 

Restructuring and other cost reduction initiatives

 

64.9

 

 

 

 

 

89.2

 

Quality remediation

 

33.0

 

 

 

 

 

35.9

 

Acquisition, integration, divestiture and related

 

66.1

 

 

 

 

 

15.7

 

Operating expenses

 

5,097.3

 

 

 

 

 

5,267.7

 

Operating Profit (Loss)

 

701.0

 

 

 

 

 

(328.5

)

Other income, net

 

15.7

 

 

 

 

 

17.4

 

Interest expense, net

 

(159.6

)

 

 

 

 

(158.9

)

Earnings (loss) before income taxes

 

557.1

 

 

 

 

 

(470.0

)

Provision for income taxes

 

71.1

 

 

 

 

 

1.2

 

Net Earnings (Loss)

 

486.0

 

 

 

 

 

(471.2

)

Less: Net earnings attributable to noncontrolling interest

 

0.4

 

 

 

 

 

1.4

 

Net Earnings (Loss) of Zimmer Biomet Holdings, Inc.

$

485.6

 

 

 

 

$

(472.6

)

Earnings (Loss) Per Common Share

 

 

 

 

 

 

 

 

 

Basic

$

2.33

 

 

 

 

$

(2.29

)

Diluted

$

2.31

 

 

 

 

$

(2.29

)

Weighted Average Common Shares Outstanding

 

 

 

 

 

 

 

 

 

Basic

 

208.5

 

 

 

 

 

206.8

 

Diluted

 

210.5

 

 

 

 

 

206.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Page 11 of 27

 

 

ZIMMER BIOMET HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, unaudited)

 

 

 

September 30,

 

December 31,

 

 

2021

 

2020

Assets

 

 

 

 

Cash and cash equivalents

 

$919.6

 

$802.1

Receivables, net

 

1,392.0

 

1,452.7

Inventories

 

2,517.4

 

2,450.7

Other current assets

 

483.4

 

377.8

Total current assets

 

5,312.4

 

5,083.3

Property, plant and equipment, net

 

2,008.2

 

2,047.7

Goodwill

 

9,212.0

 

9,261.8

Intangible assets, net

 

6,470.3

 

7,055.5

Other assets

 

1,005.7

 

969.4

Total Assets

 

$24,008.6

 

$24,417.7

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities

 

$1,893.4

 

$2,056.9

Current portion of long-term debt

 

1,045.7

 

500.0

Other long-term liabilities

 

1,897.2

 

2,034.9

Long-term debt

 

6,458.1

 

7,626.5

Stockholders' equity

 

12,714.2

 

12,199.4

Total Liabilities and Stockholders' Equity

 

$24,008.6

 

$24,417.7

 

Page 12 of 27

 

 

 

ZIMMER BIOMET HOLDINGS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

 

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

Cash flows provided by (used in) operating activities

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

486.0

 

 

$

(471.2

)

Depreciation and amortization

 

 

800.3

 

 

 

767.3

 

Share-based compensation

 

 

67.6

 

 

 

62.0

 

Goodwill and intangible asset impairment

 

 

16.3

 

 

 

645.0

 

Changes in operating assets and liabilities, net of acquired assets and liabilities

 

 

 

 

 

 

 

 

Income taxes

 

 

(74.8

)

 

 

(55.0

)

Receivables

 

 

17.9

 

 

 

13.6

 

Inventories

 

 

(94.6

)

 

 

(108.6

)

Accounts payable and accrued expenses

 

 

(7.1

)

 

 

(131.4

)

Other assets and liabilities

 

 

(78.1

)

 

 

57.7

 

Net cash provided by operating activities

 

 

1,133.5

 

 

 

779.4

 

Cash flows provided by (used in) investing activities

 

 

 

 

 

 

 

 

Additions to instruments

 

 

(222.9

)

 

 

(222.8

)

Additions to other property, plant and equipment

 

 

(108.9

)

 

 

(89.8

)

Net investment hedge settlements

 

 

(2.4

)

 

 

43.0

 

Investments in other assets

 

 

(23.2

)

 

 

(28.3

)

Net cash used in investing activities

 

 

(357.4

)

 

 

(297.9

)

Cash flows provided by (used in) financing activities

 

 

 

 

 

 

 

 

Proceeds from senior notes

 

 

-

 

 

 

1,497.1

 

Redemption of senior notes

 

 

(500.0

)

 

 

(1,500.0

)

Dividends paid to stockholders

 

 

(149.9

)

 

 

(148.7

)

Proceeds from employee stock compensation plans

 

 

117.3

 

 

 

97.7

 

Net cash flows from unremitted collections from factoring programs

 

 

-

 

 

 

(39.6

)

Business combination contingent consideration payments

 

 

(6.5

)

 

 

(13.0

)

Deferred business combination payments

 

 

(100.0

)

 

 

-

 

Debt issuance costs

 

 

(1.5

)

 

 

(22.3

)

Other financing activities

 

 

(9.6

)

 

 

(6.7

)

Net cash used in financing activities

 

 

(650.2

)

 

 

(135.5

)

Effect of exchange rates on cash and cash equivalents

 

 

(8.4

)

 

 

3.4

 

Increase in cash and cash equivalents

 

 

117.5

 

 

 

349.4

 

Cash and cash equivalents, beginning of period

 

 

802.1

 

 

 

617.9

 

Cash and cash equivalents, end of period

 

$

919.6

 

 

$

967.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 13 of 27

 

 

 

 

ZIMMER BIOMET HOLDINGS, INC.

NET SALES BY GEOGRAPHY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

% Inc/(Dec)

 

 

Volume / Mix

 

 

Price

 

 

Foreign Exchange

 

 

Americas

 

$

1,180.5

 

 

$

1,216.5

 

 

 

(3.0

)

%

 

(2.1

)

%

 

(1.1

)

%

 

0.2

 

%

EMEA

 

 

393.1

 

 

 

366.2

 

 

 

7.4

 

 

 

6.1

 

 

 

(0.2

)

 

 

1.5

 

 

Asia Pacific

 

 

350.4

 

 

 

346.6

 

 

 

1.1

 

 

 

5.2

 

 

 

(4.7

)

 

 

0.6

 

 

Total

 

$

1,924.0

 

 

$

1,929.3

 

 

 

(0.3

)

%

 

0.7

 

%

 

(1.5

)

%

 

0.5

 

%

 

 

 

 

 

 

ZIMMER BIOMET HOLDINGS, INC.

NET SALES BY PRODUCT CATEGORY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

% Inc/(Dec)

 

 

Volume / Mix

 

 

Price

 

 

Foreign Exchange

 

 

Knees

 

$

647.9

 

 

$

648.5

 

 

 

(0.1

)

%

 

1.4

 

%

 

(2.1

)

%

 

0.6

 

%

Hips

 

 

453.8

 

 

 

484.1

 

 

 

(6.3

)

 

 

(2.8

)

 

 

(3.8

)

 

 

0.3

 

 

S.E.T.

 

 

437.6

 

 

 

417.1

 

 

 

4.9

 

 

 

3.5

 

 

 

0.7

 

 

 

0.7

 

 

Dental & Spine

 

 

238.6

 

 

 

253.4

 

 

 

(5.8

)

 

 

(6.7

)

 

 

0.6

 

 

 

0.3

 

 

Other

 

 

146.1

 

 

 

126.2

 

 

 

15.7

 

 

 

17.3

 

 

 

(1.9

)

 

 

0.3

 

 

Total

 

$

1,924.0

 

 

$

1,929.3

 

 

 

(0.3

)

%

 

0.7

 

%

 

(1.5

)

%

 

0.5

 

%

 

 

 

 

 


Page 14 of 27

 

 

ZIMMER BIOMET HOLDINGS, INC.

NET SALES BY GEOGRAPHY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

% Inc

 

 

Volume / Mix

 

 

Price

 

 

Foreign Exchange

 

 

Americas

 

$

3,535.1

 

 

$

3,051.5

 

 

 

15.8

 

%

 

17.2

 

%

 

(1.7

)

%

 

0.3

 

%

EMEA

 

 

1,207.1

 

 

 

983.0

 

 

 

22.8

 

 

 

16.2

 

 

 

(0.2

)

 

 

6.8

 

 

Asia Pacific

 

 

1,056.1

 

 

 

904.7

 

 

 

16.7

 

 

 

15.1

 

 

 

(2.7

)

 

 

4.3

 

 

Total

 

$

5,798.3

 

 

$

4,939.2

 

 

 

17.4

 

%

 

16.6

 

%

 

(1.6

)

%

 

2.4

 

%

 

 

 

 

 

ZIMMER BIOMET HOLDINGS, INC.

NET SALES BY PRODUCT CATEGORY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

% Inc

 

 

Volume / Mix

 

 

Price

 

 

Foreign Exchange

 

 

Knees

 

$

1,927.8

 

 

$

1,652.2

 

 

 

16.7

 

%

 

16.3

 

%

 

(2.2

)

%

 

2.6

 

%

Hips

 

 

1,375.4

 

 

 

1,246.4

 

 

 

10.3

 

 

 

11.2

 

 

 

(3.1

)

 

 

2.2

 

 

S.E.T.

 

 

1,317.3

 

 

 

1,090.7

 

 

 

20.8

 

 

 

17.8

 

 

 

0.5

 

 

 

2.5

 

 

Dental & Spine

 

 

748.1

 

 

 

625.2

 

 

 

19.7

 

 

 

18.2

 

 

 

(0.4

)

 

 

1.9

 

 

Other

 

 

429.7

 

 

 

324.7

 

 

 

32.3

 

 

 

31.8

 

 

 

(1.9

)

 

 

2.4

 

 

Total

 

$

5,798.3

 

 

$

4,939.2

 

 

 

17.4

 

%

 

16.6

 

%

 

(1.6

)

%

 

2.4

 

%


Page 15 of 27

 

 

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF REPORTED NET SALES % CHANGE TO

CONSTANT CURRENCY % CHANGE

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

September 30, 2021 vs. 2020

 

 

 

 

 

 

 

 

Foreign

 

 

 

Constant

 

 

 

 

 

 

 

 

Exchange

 

 

 

Currency

 

 

 

% Change

 

 

 

Impact

 

 

 

% Change

 

 

Geographic Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

(3.0

)

%

 

 

0.2

 

%

 

 

(3.2

)

%

EMEA

 

7.4

 

 

 

 

1.5

 

 

 

 

5.9

 

 

Asia Pacific

 

1.1

 

 

 

 

0.6

 

 

 

 

0.5

 

 

Total

 

(0.3

)

%

 

 

0.5

 

%

 

 

(0.8

)

%

Product Categories

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Knees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

(3.5

)

%

 

 

0.3

 

%

 

 

(3.8

)

%

EMEA

 

7.1

 

 

 

 

1.3

 

 

 

 

5.8

 

 

Asia Pacific

 

3.8

 

 

 

 

1.4

 

 

 

 

2.4

 

 

Total

 

(0.1

)

 

 

 

0.6

 

 

 

 

(0.7

)

 

Hips

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

(9.1

)

 

 

 

0.3

 

 

 

 

(9.4

)

 

EMEA

 

8.6

 

 

 

 

1.3

 

 

 

 

7.3

 

 

Asia Pacific

 

(14.4

)

 

 

 

(0.6

)

 

 

 

(13.8

)

 

Total

 

(6.3

)

 

 

 

0.3

 

 

 

 

(6.6

)

 

S.E.T

 

4.9

 

 

 

 

0.7

 

 

 

 

4.2

 

 

Dental & Spine

 

(5.8

)

 

 

 

0.3

 

 

 

 

(6.1

)

 

Other

 

15.7

 

 

 

 

0.3

 

 

 

 

15.4

 

 

Total

 

(0.3

)

%

 

 

0.5

 

%

 

 

(0.8

)

%

 

 


Page 16 of 27

 

 

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF REPORTED NET SALES % CHANGE TO

CONSTANT CURRENCY % CHANGE

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

September 30, 2021 vs. 2020

 

 

 

 

 

 

 

 

Foreign

 

 

 

Constant

 

 

 

 

 

 

 

 

Exchange

 

 

 

Currency

 

 

 

% Change

 

 

 

Impact

 

 

 

% Change

 

 

Geographic Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

15.8

 

%

 

 

0.3

 

%

 

 

15.5

 

%

EMEA

 

22.8

 

 

 

 

6.8

 

 

 

 

16.0

 

 

Asia Pacific

 

16.7

 

 

 

 

4.3

 

 

 

 

12.4

 

 

Total

 

17.4

 

%

 

 

2.4

 

%

 

 

15.0

 

%

Product Categories

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Knees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

14.6

 

%

 

 

0.3

 

%

 

 

14.3

 

%

EMEA

 

20.6

 

 

 

 

6.4

 

 

 

 

14.2

 

 

Asia Pacific

 

19.0

 

 

 

 

5.3

 

 

 

 

13.7

 

 

Total

 

16.7

 

 

 

 

2.6

 

 

 

 

14.1

 

 

Hips

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

9.8

 

 

 

 

0.5

 

 

 

 

9.3

 

 

EMEA

 

19.7

 

 

 

 

6.3

 

 

 

 

13.4

 

 

Asia Pacific

 

2.1

 

 

 

 

2.5

 

 

 

 

(0.4

)

 

Total

 

10.3

 

 

 

 

2.2

 

 

 

 

8.1

 

 

S.E.T

 

20.8

 

 

 

 

2.5

 

 

 

 

18.3

 

 

Dental & Spine

 

19.7

 

 

 

 

1.9

 

 

 

 

17.8

 

 

Other

 

32.3

 

 

 

 

2.4

 

 

 

 

29.9

 

 

Total

 

17.4

 

%

 

 

2.4

 

%

 

 

15.0

 

%

 

 

 

Page 17 of 27

 

 

 

ZIMMER BIOMET HOLDINGS, INC.

 

 

RECONCILIATION OF REPORTED NET SALES % CHANGE TO

 

 

CONSTANT CURRENCY % CHANGE

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign

 

 

 

Constant

 

 

 

 

 

Net Sales

 

 

 

 

 

 

Exchange

 

 

 

Currency

 

 

 

 

 

2021

 

 

2019

 

% Change

 

 

 

Impact

 

 

 

% Change

 

 

 

 

Geographic Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

1,180.5

 

 

$

1,179.2

 

 

0.1

 

%

 

 

0.1

 

%

 

 

-

 

%

 

 

EMEA

 

393.1

 

 

 

374.6

 

 

4.9

 

 

 

 

4.6

 

 

 

 

0.3

 

 

 

 

Asia Pacific

 

350.4

 

 

 

338.6

 

 

3.5

 

 

 

 

2.0

 

 

 

 

1.5

 

 

 

 

Total

$

1,924.0

 

 

$

1,892.4

 

 

1.7

 

%

 

 

1.3

 

%

 

 

0.4

 

%

 

 

Product Categories

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Knees

$

647.9

 

 

$

645.4

 

 

0.4

 

 

 

 

1.4

 

 

 

 

(1.0

)

 

 

 

Hips

 

453.8

 

 

 

459.2

 

 

(1.2

)

 

 

 

1.2

 

 

 

 

(2.4

)

 

 

 

S.E.T

 

437.6

 

 

 

400.6

 

 

9.2

 

 

 

 

1.5

 

 

 

 

7.7

 

 

 

 

Dental & Spine

 

238.6

 

 

 

241.2

 

 

(1.0

)

 

 

 

1.0

 

 

 

 

(2.0

)

 

 

 

Other

 

146.1

 

 

 

146.0

 

 

-

 

 

 

 

1.1

 

 

 

 

(1.1

)

 

 

 

Total

$

1,924.0

 

 

$

1,892.4

 

 

1.7

 

%

 

 

1.3

 

%

 

 

0.4

 

%

 

 


Page 18 of 27

 

 

 

ZIMMER BIOMET HOLDINGS, INC.

 

RECONCILIATION OF REPORTED TO ADJUSTED RESULTS

 

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

 

(in millions, except per share amounts, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021

 

 

 

Cost of products sold, excluding intangible asset amortization

 

 

Intangible asset amortization

 

 

Research and development

 

 

Selling, general and administrative

 

 

Restructuring and other cost reduction initiatives

 

 

Quality remediation

 

 

Acquisition, integration, divestiture and related

 

 

Other income, net

 

 

Provision for income taxes

 

 

Net Earnings of Zimmer Biomet Holdings, Inc.

 

 

Diluted earnings per common share

 

As Reported

 

$

581.5

 

 

$

153.7

 

 

$

108.9

 

 

$

802.4

 

 

$

23.5

 

 

$

11.8

 

 

$

27.3

 

 

$

0.3

 

 

$

16.8

 

 

$

145.6

 

 

$

0.69

 

Inventory and manufacturing-related charges(1)

 

 

(11.0

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5.5

 

 

 

5.5

 

 

 

0.03

 

Intangible asset amortization(2)

 

 

-

 

 

 

(153.7

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

24.4

 

 

 

129.3

 

 

 

0.61

 

Restructuring and other cost reduction initiatives(4)

 

 

0.2

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(23.5

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5.2

 

 

 

18.1

 

 

 

0.09

 

Quality remediation(5)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(11.8

)

 

 

-

 

 

 

-

 

 

 

2.7

 

 

 

9.1

 

 

 

0.04

 

Acquisition, integration, divestiture and related(6)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(27.3

)

 

 

-

 

 

 

4.9

 

 

 

22.4

 

 

 

0.11

 

Litigation(7)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(43.6

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4.4

 

 

 

39.2

 

 

 

0.19

 

European Union Medical Device Regulation(8)

 

 

(0.1

)

 

 

-

 

 

 

(11.8

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2.6

 

 

 

9.3

 

 

 

0.04

 

Other charges(10)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4.3

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3.6

 

 

 

0.8

 

 

 

7.1

 

 

 

0.03

 

Swiss tax reform(11)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9.6

)

 

 

9.6

 

 

 

0.05

 

Other certain tax adjustments(12)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

14.0

 

 

 

(14.0

)

 

 

(0.07

)

As Adjusted

 

$

570.6

 

 

$

-

 

 

$

97.1

 

 

$

754.5

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

3.9

 

 

$

71.7

 

 

$

381.2

 

 

$

1.81

 

 

 

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020

 

 

 

Cost of products sold, excluding intangible asset amortization

 

 

Intangible asset amortization

 

 

Research and development

 

 

Selling, general and administrative

 

 

Restructuring and other cost reduction initiatives

 

 

Quality remediation

 

 

Acquisition, integration, divestiture and related

 

 

Other income, net

 

 

Provision for income taxes

 

 

Net Earnings of Zimmer Biomet Holdings, Inc.

 

 

Diluted earnings per common share

 

As Reported

 

$

569.4

 

 

$

149.7

 

 

$

85.9

 

 

$

790.0

 

 

$

16.2

 

 

$

9.8

 

 

$

9.1

 

 

$

10.6

 

 

$

9.7

 

 

$

242.5

 

 

$

1.16

 

Inventory and manufacturing-related charges(1)

 

 

(2.3

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4.3

 

 

 

(2.0

)

 

 

(0.01

)

Intangible asset amortization(2)

 

 

-

 

 

 

(149.7

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

39.3

 

 

 

110.4

 

 

 

0.53

 

Restructuring and other cost reduction initiatives(4)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(16.2

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6.5

 

 

 

9.7

 

 

 

0.05

 

Quality remediation(5)

 

 

(0.2

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9.8

)

 

 

-

 

 

 

-

 

 

 

3.2

 

 

 

6.8

 

 

 

0.03

 

Acquisition, integration, divestiture and related(6)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9.1

)

 

 

-

 

 

 

1.9

 

 

 

7.2

 

 

 

0.03

 

Litigation(7)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(19.3

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6.8

 

 

 

12.5

 

 

 

0.06

 

European Union Medical Device Regulation(8)

 

 

-

 

 

 

-

 

 

 

(2.0

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1.1

 

 

 

0.9

 

 

 

0.01

 

Other charges(10)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.3

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(8.6

)

 

 

(4.7

)

 

 

(3.6

)

 

 

(0.02

)

Swiss tax reform(11)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4.6

 

 

 

(4.6

)

 

 

(0.02

)

Other certain tax adjustments(12)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3.0

 

 

 

(3.0

)

 

 

(0.01

)

As Adjusted

 

$

566.9

 

 

$

-

 

 

$

83.9

 

 

$

770.4

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

2.0

 

 

$

75.7

 

 

$

376.8

 

 

$

1.81

 

 


Page 19 of 27

 

 

ZIMMER BIOMET HOLDINGS, INC.

 

RECONCILIATION OF REPORTED TO ADJUSTED RESULTS

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

 

(in millions, except per share amounts, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

 

 

 

Cost of products sold, excluding intangible asset amortization

 

 

Intangible asset amortization

 

 

Research and development

 

 

Selling, general and administrative

 

 

Goodwill and intangible asset impairment

 

 

Restructuring and other cost reduction initiatives

 

 

Quality remediation

 

 

Acquisition, integration, divestiture and related

 

 

Other income, net

 

 

Provision for income taxes

 

 

Net Earnings (Loss) of Zimmer Biomet Holdings, Inc.

 

 

Diluted earnings (loss)  per common share

 

As Reported

 

$

1,679.5

 

 

$

463.8

 

 

$

383.8

 

 

$

2,389.9

 

 

$

16.3

 

 

$

64.9

 

 

$

33.0

 

 

$

66.1

 

 

$

15.7

 

 

$

71.1

 

 

$

485.6

 

 

$

2.31

 

Inventory and manufacturing-related charges(1)

 

 

(13.0

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

16.0

 

 

 

(3.0

)

 

 

(0.01

)

Intangible asset amortization(2)

 

 

-

 

 

 

(463.8

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

85.6

 

 

 

378.2

 

 

 

1.80

 

Goodwill and intangible asset impairment(3)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(16.3

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2.1

 

 

 

14.2

 

 

 

0.07

 

Restructuring and other cost reduction initiatives(4)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(64.9

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

14.5

 

 

 

50.4

 

 

 

0.24

 

Quality remediation(5)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(33.0

)

 

 

-

 

 

 

-

 

 

 

7.4

 

 

 

25.6

 

 

 

0.12

 

Acquisition, integration, divestiture and related(6)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(66.1

)

 

 

-

 

 

 

13.2

 

 

 

52.9

 

 

 

0.25

 

Litigation(7)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(53.3

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5.3

 

 

 

48.0

 

 

 

0.23

 

European Union Medical Device Regulation(8)

 

 

(0.1

)

 

 

-

 

 

 

(29.3

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6.4

 

 

 

23.0

 

 

 

0.11

 

Certain R&D agreements(9)

 

 

-

 

 

 

-

 

 

 

(65.0

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

14.6

 

 

 

50.4

 

 

 

0.24

 

Other charges(10)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2.4

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3.5

)

 

 

(2.0

)

 

 

0.9

 

 

 

-

 

Swiss tax reform(11)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(28.4

)

 

 

28.4

 

 

 

0.13

 

Other certain tax adjustments(12)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

13.8

 

 

 

(13.8

)

 

 

(0.07

)

As Adjusted

 

$

1,666.4

 

 

$

-

 

 

$

289.5

 

 

$

2,334.2

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

12.2

 

 

$

219.6

 

 

$

1,140.8

 

 

$

5.42

 

 

 

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

 

 

 

Cost of products sold, excluding intangible asset amortization

 

 

Intangible asset amortization

 

 

Research and development

 

 

Selling, general and administrative

 

 

Goodwill and intangible asset impairment

 

 

Restructuring and other cost reduction initiatives

 

 

Quality remediation

 

 

Acquisition, integration, divestiture and related

 

 

Other income, net

 

 

Provision for income taxes

 

 

Net Earnings (Loss) of Zimmer Biomet Holdings, Inc.

 

 

Diluted earnings (loss)  per common share

 

As Reported

 

$

1,481.0

 

 

$

445.0

 

 

$

272.0

 

 

$

2,283.9

 

 

$

645.0

 

 

$

89.2

 

 

$

35.9

 

 

$

15.7

 

 

$

17.4

 

 

$

1.2

 

 

$

(472.6

)

 

$

(2.29

)

Inventory and manufacturing-related charges(1)

 

 

(4.3

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

10.2

 

 

 

(5.9

)

 

 

(0.03

)

Intangible asset amortization(2)

 

 

-

 

 

 

(445.0

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

77.5

 

 

 

367.5

 

 

 

1.78

 

Goodwill and intangible asset impairment(3)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(645.0

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5.7

 

 

 

639.3

 

 

 

3.09

 

Restructuring and other cost reduction initiatives(4)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(89.2

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

18.7

 

 

 

70.5

 

 

 

0.34

 

Quality remediation(5)

 

 

0.1

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(35.9

)

 

 

-

 

 

 

-

 

 

 

7.3

 

 

 

28.5

 

 

 

0.14

 

Acquisition, integration, divestiture and related(6)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(15.7

)

 

 

-

 

 

 

2.9

 

 

 

12.8

 

 

 

0.06

 

Litigation(7)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(100.4

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

18.7

 

 

 

81.7

 

 

 

0.40

 

European Union Medical Device Regulation(8)

 

 

-

 

 

 

-

 

 

 

(19.1

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3.2

 

 

 

15.9

 

 

 

0.07

 

Other charges(10)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(18.1

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(12.5

)

 

 

7.9

 

 

 

(2.3

)

 

 

(0.01

)

Swiss tax reform(11)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(11.6

)

 

 

11.6

 

 

 

0.06

 

Other certain tax adjustments(12)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6.1

 

 

 

(6.1

)

 

 

(0.03

)

Effect of dilutive shares assuming net earnings(13)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(0.02

)

As Adjusted

 

$

1,476.8

 

 

$

-

 

 

$

252.9

 

 

$

2,165.4

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

4.9

 

 

$

147.8

 

 

$

740.9

 

 

$

3.56

 


Page 20 of 27

 

 

 

(1)

Inventory and manufacturing-related charges include excess and obsolete inventory charges on certain product lines we intend to discontinue, incremental cost of products sold from stepping up inventory to its fair value from its manufactured cost in business combination accounting and other inventory and manufacturing-related charges or gains.

 

(2)

We exclude intangible asset amortization as well as deferred tax rate changes on our intangible assets from our non-GAAP financial measures because we internally assess our performance against our peers without this amortization.  Due to various levels of acquisitions among our peers, intangible asset amortization can vary significantly from company to company.

 

(3)

In the first quarter of 2020, we recognized goodwill impairment charges of $470.0 million and $142.0 million related to our EMEA and Dental reporting units, respectively. In the second quarters of 2021 and 2020, we recognized $16.3 million and $33.0 million, respectively, of in-process research and development (“IPR&D”) intangible asset impairments on certain IPR&D projects.

 

(4)

In December 2019, our Board of Directors approved, and we initiated, a new global restructuring program that includes a reorganization of key businesses and an overall effort to reduce costs in order to accelerate decision-making and focus the organization on priorities to drive growth.  Restructuring and other cost reduction initiatives also include other cost reduction initiatives that have the goal of reducing costs across the organization.  The costs include employee termination benefits; contract terminations for facilities and sales agents; and other charges, such as retention period salaries and benefits and relocation costs.  

 

(5)

We are addressing inspectional observations on Form 483 and a Warning Letter issued by the U.S. Food and Drug Administration (“FDA”) following its previous inspections of our Warsaw North Campus facility, among other matters.  This quality remediation has required us to devote significant financial resources.  The majority of the expenses are related to consultants who are helping us to update previous documents and redesign certain processes.

 

(6)

The acquisition, integration, divestiture and related gains and expenses we have excluded from our non-GAAP financial measures resulted from the planned spinoff of ZimVie (our Spine and Dental Businesses)and various acquisitions.  

 

(7)

We are involved in routine patent litigation, product liability litigation, commercial litigation and other various litigation matters.  We review litigation matters from both a qualitative and quantitative perspective to determine if excluding the losses or gains will provide our investors with useful incremental information.  Litigation matters can vary in their characteristics, frequency and significance to our operating results.  The litigation charges and gains excluded from our non-GAAP financial measures in the periods presented relate to product liability matters where we have received numerous claims on specific products, patent litigation and commercial litigation related to a common matter in multiple jurisdictions.  In regards to the product liability matters, due to the complexities involved and claims filed in multiple districts, the expenses associated with these matters are significant to our operating results.  Once the litigation matter has been excluded from our non-GAAP financial measures in a particular period, any additional expenses or gains from changes in estimates are also excluded, even if they are not significant, to ensure consistency in our non-GAAP financial measures from period-to-period.

 

(8)

The European Union Medical Device Regulation imposes significant additional premarket and postmarket requirements.  The new regulations provided a transition period until May 2021 for previously-approved medical devices to meet the additional requirements.  For certain devices, this transition period can be extended until May 2024.  We are excluding from our non-GAAP financial measures the incremental costs incurred to establish initial compliance with the regulations related to our previously-approved medical devices.  The incremental costs primarily include temporary personnel and third-party professionals necessary to supplement our internal resources.

 

(9)

During the nine-month period ended September 30, 2021, we entered into certain agreements to gain access to or acquire third-party IPR&D projects.

 

(10)

We have incurred other various expenses from specific events or projects that we consider highly variable or that have a significant impact to our operating results that we have excluded from our non-GAAP measures.  These include costs related to legal entity, distribution and manufacturing optimization, including contract terminations, gains and losses from changes in fair value on our equity investments, as well as, in the 2020 period, our costs of complying with a Deferred Prosecution Agreement (“DPA”) with the U.S. government related to certain Foreign Corrupt Practices Act matters involving Biomet and certain of its subsidiaries, which DPA concluded in February 2021.

 

(11)

We recognized a tax benefit related to Switzerland’s Federal Act on Tax Reform and AHV Financing (“TRAF”) in addition to an impact from certain restructuring transactions in Switzerland. Also included are tax adjustments relating to ongoing impacts of tax only amortization resulting from TRAF as well as certain restructuring transactions in Switzerland.

 

(12)

Other certain tax adjustments relate to various discrete tax period adjustments as well as US tax reform planning.

 

Page 21 of 27

 

 

(13)

Due to the reported net loss for this period, the effect of dilutive shares assuming net earnings is shown as an adjustment.  Diluted share count used in Adjusted Diluted EPS is:

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2020

 

 

 

 

 

 

Diluted shares

 

 

206.8

 

Dilutive shares assuming net earnings

 

 

1.4

 

Adjusted diluted shares

 

 

208.2

 

 

 

  

 

 


Page 22 of 27

 

 

ZIMMER BIOMET HOLDINGS, INC.

 

RECONCILIATION OF NET CASH PROVIDED BY OPERATING

 

ACTIVITIES TO FREE CASH FLOW

 

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

 

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net cash provided by operating activities

$

433.1

 

 

$

381.3

 

 

$

1,133.5

 

 

$

779.4

 

Additions to instruments

 

(72.4

)

 

 

(63.5

)

 

 

(222.9

)

 

 

(222.8

)

Additions to other property, plant and equipment

 

(54.2

)

 

 

(30.6

)

 

 

(108.9

)

 

 

(89.8

)

Free cash flow

$

306.5

 

 

$

287.2

 

 

$

801.7

 

 

$

466.8

 

 


Page 23 of 27

 

 

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF GROSS PROFIT & MARGIN TO ADJUSTED GROSS

PROFIT & MARGIN

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

 

2021

 

 

2020

 

 

Net Sales

$

1,924.0

 

 

$

1,929.3

 

 

 

$

5,798.3

 

 

$

4,939.2

 

 

Cost of products sold, excluding intangible asset amortization

 

581.5

 

 

 

569.4

 

 

 

 

1,679.5

 

 

 

1,481.0

 

 

Intangible asset amortization

 

153.7

 

 

 

149.7

 

 

 

 

463.8

 

 

 

445.0

 

 

Gross Profit

$

1,188.8

 

 

$

1,210.2

 

 

 

$

3,655.0

 

 

$

3,013.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory and manufacturing-related charges

 

11.0

 

 

 

2.3

 

 

 

 

13.0

 

 

 

4.3

 

 

Restructuring and other cost reduction initiatives

 

(0.2

)

 

 

-

 

 

 

 

-

 

 

 

-

 

 

Quality remediation

 

-

 

 

 

0.2

 

 

 

 

-

 

 

 

(0.1

)

 

European Union Medical Device Regulation

 

0.1

 

 

 

-

 

 

 

 

0.1

 

 

 

-

 

 

Intangible asset amortization

 

153.7

 

 

 

149.7

 

 

 

 

463.8

 

 

 

445.0

 

 

Adjusted gross profit

$

1,353.4

 

 

$

1,362.4

 

 

 

$

4,131.9

 

 

$

3,462.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

61.8

 

%

 

62.7

 

%

 

 

63.0

 

%

 

61.0

 

%

Inventory and manufacturing-related charges

 

0.5

 

 

 

0.1

 

 

 

 

0.2

 

 

 

0.1

 

 

Restructuring and other cost reduction initiatives

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

Quality remediation

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

European Union Medical Device Regulation

 

-

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

Intangible asset amortization

 

8.0

 

 

 

7.8

 

 

 

 

8.1

 

 

 

9.0

 

 

Adjusted gross margin

 

70.3

 

%

 

70.6

 

%

 

 

71.3

 

%

 

70.1

 

%

 


Page 24 of 27

 

 

 

 

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF OPERATING PROFIT (LOSS) & MARGIN TO ADJUSTED OPERATING PROFIT & MARGIN

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

 

2021

 

 

2020

 

 

Operating profit (loss)

$

214.9

 

 

$

299.2

 

 

 

$

701.0

 

 

$

(328.5

)

 

Inventory and manufacturing-related charges

 

11.0

 

 

 

2.3

 

 

 

 

13.0

 

 

 

4.3

 

 

Intangible asset amortization

 

153.7

 

 

 

149.7

 

 

 

 

463.8

 

 

 

445.0

 

 

Goodwill and intangible asset impairment

 

-

 

 

 

-

 

 

 

 

16.3

 

 

 

645.0

 

 

Restructuring and other cost reduction initiatives

 

23.3

 

 

 

16.2

 

 

 

 

64.9

 

 

 

89.2

 

 

Quality remediation

 

11.8

 

 

 

10.0

 

 

 

 

33.0

 

 

 

35.8

 

 

Acquisition, integration, divestiture and related

 

27.3

 

 

 

9.1

 

 

 

 

66.1

 

 

 

15.7

 

 

Litigation

 

43.6

 

 

 

19.3

 

 

 

 

53.3

 

 

 

100.4

 

 

European Union Medical Device Regulation

 

11.9

 

 

 

2.0

 

 

 

 

29.4

 

 

 

19.1

 

 

Certain R&D agreements

 

-

 

 

 

-

 

 

 

 

65.0

 

 

 

-

 

 

Other charges

 

4.3

 

 

 

0.3

 

 

 

 

2.4

 

 

 

18.1

 

 

Adjusted operating profit

$

501.8

 

 

$

508.1

 

 

 

$

1,508.2

 

 

$

1,044.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit (loss) margin

 

11.2

 

%

 

15.5

 

%

 

 

12.1

 

%

 

(6.7

)

%

Inventory and manufacturing-related charges

 

0.5

 

 

 

0.1

 

 

 

 

0.2

 

 

 

0.1

 

 

Intangible asset amortization

 

8.0

 

 

 

7.8

 

 

 

 

8.1

 

 

 

9.0

 

 

Goodwill and intangible asset impairment

 

-

 

 

 

-

 

 

 

 

0.3

 

 

 

13.1

 

 

Restructuring and other cost reduction initiatives

 

1.2

 

 

 

0.8

 

 

 

 

1.1

 

 

 

1.8

 

 

Quality remediation

 

0.6

 

 

 

0.5

 

 

 

 

0.5

 

 

 

0.7

 

 

Acquisition, integration, divestiture and related

 

1.5

 

 

 

0.5

 

 

 

 

1.1

 

 

 

0.3

 

 

Litigation

 

2.3

 

 

 

1.0

 

 

 

 

1.0

 

 

 

2.0

 

 

European Union Medical Device Regulation

 

0.6

 

 

 

0.1

 

 

 

 

0.5

 

 

 

0.4

 

 

Certain R&D agreements

 

-

 

 

 

-

 

 

 

 

1.1

 

 

 

-

 

 

Other charges

 

0.2

 

 

 

-

 

 

 

 

-

 

 

 

0.4

 

 

Adjusted operating profit margin

 

26.1

 

%

 

26.3

 

%

 

 

26.0

 

%

 

21.1

 

%

 

 

Page 25 of 27

 

 

ZIMMER BIOMET HOLDINGS, INC.

RECONCILIATION OF EFFECTIVE TAX RATE TO ADJUSTED EFFECTIVE TAX RATE

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 and 2020

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

 

2021

 

 

2020

 

 

Effective tax rate

 

10.4

 

%

 

3.8

 

%

 

 

12.8

 

%

 

(0.3

)

%

Tax effect of adjustments made to earnings before taxes(1)

 

2.5

 

 

 

9.8

 

 

 

 

5.9

 

 

 

15.8

 

 

Swiss tax reform

 

(5.8

)

 

 

1.8

 

 

 

 

(5.1

)

 

 

2.4

 

 

Other certain tax adjustments

 

8.7

 

 

 

1.2

 

 

 

 

2.5

 

 

 

(1.3

)

 

Adjusted effective tax rate

 

15.8

 

%

 

16.6

 

%

 

 

16.1

 

%

 

16.6

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes inventory and manufacturing-related charges; intangible asset amortization; goodwill impairment; restructuring and other cost reduction initiatives; quality remediation; acquisition, integration, divestiture and related; litigation; European Union Medical Device Regulation; certain R&D agreements, and other charges

 


Page 26 of 27

 

 

ZIMMER BIOMET HOLDINGS, INC.

 

RECONCILIATION OF DEBT TO NET DEBT

 

AS OF SEPTEMBER 30, 2021 and DECEMBER 31, 2020

 

(in millions, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Debt, both current and long-term

$

7,503.8

 

 

$

8,126.5

 

Cash and cash equivalents

 

(919.6

)

 

 

(802.1

)

Net debt

$

6,584.2

 

 

$

7,324.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 27 of 27