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What changed in Zimmer Biomet's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Zimmer Biomet's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+282 added−260 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-25)

Top changes in Zimmer Biomet's 2025 10-K

282 paragraphs added · 260 removed · 207 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe European Union (the “EU”) has adopted the European Medical Device Regulation (the “EU MDR”), which created a single set of medical device regulations for products marketed in all member countries. The EU MDR took effect in May 2021, replacing the European Medical Device Directive (the “MDD”). The EU MDR imposes significant additional premarket and post-market requirements.
Biggest changeIn addition, exported medical products are subject to the regulatory requirements of each country to which the medical product is exported. 7 The European Union (the “EU”) has adopted the European Medical Device Regulation (the “EU MDR”), which created a single set of medical device regulations for products marketed in all member countries.
Customs and Border Protection (“CBP”), administers controls over the import of medical devices into the U.S. and can prevent the importation of products the FDA deems to violate the FDCA or its implementing regulations. The CBP imposes its own regulatory requirements on the import of our products, including inspection and possible sanctions for noncompliance.
Customs and Border Protection (“CBP”), administers controls over the import of medical devices into the U.S. and can prevent the importation of products the FDA deems to violate the FDCA or its implementing regulations. CBP imposes its own regulatory requirements on the import of our products, including inspection and possible sanctions for noncompliance.
Our quality management system is based upon the requirements of ISO 13485, the FDA Quality System regulations, the MDD, the EU MDR and other applicable regulations for the markets in which we sell. Our principal manufacturing sites are certified to ISO 13485 and audited at regular intervals.
Our quality management system is based upon the requirements of ISO 13485, the FDA Quality Management System regulations, the MDD, the EU MDR and other applicable regulations for the markets in which we sell. Our principal manufacturing sites are certified to ISO 13485 and audited at regular intervals.
Additionally, we keep current with key surgical developments and other issues related to orthopedic surgeons, neurosurgeons, other specialists, and the medical procedures they perform. 4 We allocate resources to achieve our operating profit goals through three regional operating segments. Our operating segments are comprised of the Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific.
Additionally, we keep current with key surgical developments and other issues related to orthopedic surgeons, neurosurgeons, other specialists, and the medical procedures they perform. We allocate resources to achieve our operating profit goals through three regional operating segments. Our operating segments are comprised of the Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific.
Certain of these laws and regulations impose time-sensitive notification requirements to governmental authorities or consumers. We are also subject to emerging regulations, directives, voluntary commitments and guidance governing data security and cyber risk management for medical devices as well as emerging regulations, directives, 8 voluntary commitments and guidance relating to artificial intelligence.
Certain of these laws and regulations impose time-sensitive notification requirements to governmental authorities or consumers. We are also subject to emerging regulations, directives, voluntary commitments and guidance governing data security and cyber risk management for medical devices as well as emerging regulations, directives, voluntary commitments and guidance relating to artificial intelligence.
Stellato served with ITT beginning in May 2003, having served most recently as ITT’s General Auditor and prior to that, as Manager - Investor Relations. He began his career in public accounting with Ernst & Young LLP and Arthur Andersen LLP and is a certified public accountant. Mr.
Stellato served with ITT beginning in May 2003, having served most recently as ITT’s General Auditor and prior to that, as Manager - Investor Relations. He began his career in public accounting with Ernst & Young LLP and Arthur Andersen LLP and is a certified public accountant. 11 Mr.
Risk Factors – If we fail to comply with data privacy and security laws and regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected. Competition The orthopedics and broader musculoskeletal care industry is highly competitive.
Risk Factors – If we fail to comply with data privacy and 8 security laws and regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected. Competition The orthopedics and broader musculoskeletal care industry is highly competitive.
Mr. Stellato was appointed Vice President, Controller and Chief Accounting Officer in May 2022. Previously, he served as Vice President Finance, Global Business Services from March 2019 through April 2022, with Xylem Inc. (“Xylem”), a global provider of water technology products and services.
Stellato was appointed Vice President, Controller and Chief Accounting Officer in May 2022. Previously, he served as Vice President Finance, Global Business Services from March 2019 through April 2022, with Xylem Inc. (“Xylem”), a global provider of water technology products and services.
There are also procedures for partial reconstruction of the knee, which treat limited knee degeneration and involve the replacement of only one side, or compartment, of the knee with a unicompartmental knee prosthesis. Our significant knee brands include the Persona ® Knee, NexGen ® Knee Implants, Vanguard ® Knee, and Oxford ® Partial Knee.
There are also procedures for partial reconstruction of the knee, which treat 5 limited knee degeneration and involve the replacement of only one side, or compartment, of the knee with a unicompartmental knee prosthesis. Our significant knee brands include the Persona ® Knee, NexGen ® Knee Implants, Vanguard ® Knee, and Oxford ® Partial Knee.
In response to the different healthcare systems throughout the world, our sales and marketing strategies and organizational structures differ by region. We utilize a global approach to sales force training, marketing and medical education to provide consistent, high quality service.
In response to the different healthcare systems throughout the world, our sales and marketing strategies and organizational structures differ by country and region. We utilize a global approach to sales force training, marketing and medical education to provide consistent, high quality service.
We are subject to FDA Quality System regulations governing design and manufacturing practices, testing, manufacturing quality assurance, labeling and record keeping and reporting requirements for our products, which apply both to our own and to our third-party manufacturers' operations.
We are subject to FDA Quality Management System regulations governing design and manufacturing practices, testing, manufacturing quality assurance, labeling and record keeping and reporting requirements for our products, which apply both to our own and to our third-party manufacturers' operations.
He joined Xylem upon its spinoff from ITT 11 Corporation (“ITT”) in October 2011 and served as Xylem’s Vice President Finance, Financial Planning and Analysis through August 2017.
He joined Xylem upon its spinoff from ITT Corporation (“ITT”) in October 2011 and served as Xylem’s Vice President Finance, Financial Planning and Analysis through August 2017.
We design, manufacture and market orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; craniomaxillofacial and thoracic (“CMFT”) products; surgical products; and a suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence. We collaborate with healthcare professionals around the globe to advance the pace of innovation.
We design, manufacture and market orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; craniomaxillofacial and thoracic (“CMFT”) products; bone cement; surgical products; and a suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence. We collaborate with healthcare professionals around the globe to advance the pace of innovation.
Contracts with group purchasing organizations generally have a term of three years, with extensions as warranted. EMEA. The EMEA operating segment is our second largest operating segment. France, Germany, Italy, Spain and the United Kingdom (the “UK”) collectively accounted for approximately 50 percent of net sales in the region in 2024.
Contracts with group purchasing organizations generally have a term of three years, with extensions as warranted. EMEA. The EMEA operating segment is our second largest operating segment. France, Germany, Italy, Spain and the United Kingdom (the “UK”) collectively accounted for approximately 50 percent of net sales in the region in 2025.
Our significant hip brands include the Taperloc ® Hip System, Avenir Complete ® Hip System, Arcos ® Modular Hip System, and G7 ® Acetabular System. Our ROSA ® Robot is also utilized in hip procedures. S.E.T. Our S.E.T. product category includes sports medicine, biologics, foot and ankle, upper extremities, trauma and CMFT products.
Our significant hip brands include the Taperloc ® Hip System, Avenir Complete ® Hip System, Z1 ® Hip Implant, Arcos ® Modular Hip System, and G7 ® Acetabular System. Our ROSA ® Robot is also utilized in hip procedures. S.E.T. Our S.E.T. product category includes sports medicine, biologics, foot and ankle, upper extremities, trauma and CMFT products.
Upadhyay served as Senior Vice President, Global Financial Operations at Bristol-Myers Squibb Company from November 2016 until June 2019. Before joining Bristol-Myers Squibb, he served as Executive Vice President and Chief Financial Officer of Endo International plc from September 2013 to November 2016. Prior to his tenure at Endo International, Mr.
Prior to joining Zimmer Biomet, Mr. Upadhyay served as Senior Vice President, Global Financial Operations at Bristol-Myers Squibb Company from November 2016 until June 2019. Before joining Bristol-Myers Squibb, he served as Executive Vice President and Chief Financial Officer of Endo International plc from September 2013 to November 2016. Prior to his tenure at Endo International, Mr.
Winkler joined Zimmer Biomet as Group Vice President of Human Resources in February 2020 and was appointed Senior Vice President, Chief Human Resources Officer in March 2021. Prior to joining Zimmer Biomet, she served Cardinal Health, Inc. as a Worldwide Vice President of Human Resources in the Medical Segment from November 2016 through January 2020. Before joining Cardinal Health, Ms.
Winkler was appointed Senior Vice President, Chief Human Resources Officer in March 2021, after joining Zimmer Biomet as Group Vice President of Human Resources in February 2020. Prior to joining Zimmer Biomet, she served Cardinal Health, Inc. as a Worldwide Vice President of Human Resources in the Medical Segment from November 2016 through January 2020. Before joining Cardinal Health, Ms.
Data Privacy Laws We are subject to evolving national, state, international and other data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, location, storage, disposal and protection of health-related and other personal information, including laws and regulations that regulate and restrict cross-border data transfers.
Data Privacy, Cyber and Artificial Intelligence Laws We are subject to evolving national, state, international and other data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, location, storage, disposal and protection of health-related and other personal information, including laws and regulations that regulate and restrict cross-border data transfers.
The following is a summary of our operating segments. See Note 19 to our consolidated financial statements for more information regarding our segments. Americas. The Americas 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.
The following is a summary of our operating segments. See Note 18 to our consolidated financial statements for more information regarding our segments. 4 Americas. The Americas 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.
The guiding principles are: • Respect and show gratitude for the contributions and diverse perspectives of all team members • Commit to the highest standards of patient safety, quality and integrity • Focus our resources in areas where we will make a difference • Ensure the company’s return is equivalent to the value we provide our customers and patients • Give back to our communities and people in need.
The guiding principles are: • Respect and show gratitude for the contributions and diverse perspectives of others • Commit to the highest standards of patient safety, quality and integrity • Focus our resources in areas where we will make a difference • Ensure the company’s return is equivalent to the value we provide our customers and patients • Give back to our communities and people in need.
Our sports medicine products are primarily for the repair of soft tissue injuries, most commonly used in the knee and shoulder. Sports medicine products represented 13 percent of our S.E.T. product category net sales in 2024. Our biologics products are used as early intervention for joint preservation or to support surgical procedures.
Our sports medicine products are primarily for the repair of soft tissue injuries, most commonly used in the knee and shoulder. Sports medicine products represented 12 percent of our S.E.T. product category net sales in 2025. Our biologics products are used as early intervention for joint preservation or to support surgical procedures.
Prior to joining Zimmer Biomet, Mr. Tornos served as Worldwide President of the Global Urology, Medical and Critical Care Divisions of Becton, Dickinson and Company (“BD”) (and previously, C. R. Bard, Inc. (“Bard”)) from June 2017 until October 2018. From June 2017 until BD’s acquisition of Bard in December 2017, Mr.
Tornos served as Worldwide President of the Global Urology, Medical and Critical Care Divisions of Becton, Dickinson and Company (“BD”) (and previously, C. R. Bard, Inc. (“Bard”)) from June 2017 until October 2018. From June 2017 until BD’s acquisition of Bard in December 2017, Mr.
Our upper extremities products represented 32 percent of our S.E.T. product category net sales in 2024. Our trauma products are used to stabilize damaged or broken bones and their surrounding tissues to support the body’s natural healing process. Trauma products represented 23 percent of our S.E.T. product category net sales in 2024.
Our upper extremities products represented 30 percent of our S.E.T. product category net sales in 2025. Our trauma products are used to stabilize damaged or broken bones and their surrounding tissues to support the body’s natural healing process. Trauma products represented 20 percent of our S.E.T. product category net sales in 2025.
He joined the Company in September 2003 as Associate Counsel and Assistant Secretary. Prior to joining the Company, he served as Vice President and General Counsel of L&N Sales and Marketing, Inc. in Pennsylvania and he practiced law with the firm of Morgan, Lewis & Bockius in Philadelphia, focusing on corporate and securities law, mergers and acquisitions and financial transactions.
Prior to joining the Company, he served as Vice President and General Counsel of L&N Sales and Marketing, Inc. in Pennsylvania and he practiced law with the firm of Morgan, Lewis & Bockius in Philadelphia, focusing on corporate and securities law, mergers and acquisitions and financial transactions. Mr.
Biologics products represented 6 percent of our S.E.T. product category net sales in 2024. Our foot and ankle and upper extremities products are designed to treat arthritic conditions and fractures in the foot, ankle, shoulder, elbow and wrist. Our foot and ankle products represented 3 percent of our S.E.T. product category net sales in 2024.
Biologics products represented 5 percent of our S.E.T. product category net sales in 2025. Our foot and ankle and upper extremities products are designed to treat arthritic conditions and fractures in the foot, ankle, shoulder, elbow and wrist. Our foot and ankle products represented 12 percent of our S.E.T. product category net sales in 2025.
In 2024, our Total Recordable Incident Rate was 0.30 and our Lost Time Incident Rate was 0.14. These results are shared with relevant regulatory agencies as required and presented to our Board of Directors. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth certain information with respect to our executive officers as of February 15, 2025.
In 2025, our Total Recordable Incident Rate was 0.22 and our Lost Time Incident Rate was 0.10. These results are shared with relevant regulatory agencies as required and presented to our Board of Directors. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth certain information with respect to our executive officers as of February 13, 2026.
Japan is the largest market within this segment, accounting for approximately 45 percent of the region’s net sales in 2024.
Japan is the largest market within this segment, accounting for approximately 50 percent of the region’s net sales in 2025.
With sales to stocking distributors, some healthcare dealers and some hospitals, title to product passes upon shipment. Consignment sales represented approximately 85 percent of our net sales in 2024. No individual customer accounted for more than 2 percent of our net sales for 2024.
With sales to stocking distributors, some healthcare dealers and some hospitals, and at times to some direct channel accounts, title to product typically passes upon shipment. Consignment sales represented approximately 85 percent of our net sales in 2025. No individual customer accounted for more than 2 percent of our net sales for 2025.
CMFT products represented 21 percent of our S.E.T. product category net sales in 2024.‌ Our significant S.E.T. brands include the JuggerKnot ® Soft Anchor System, Gel-One ® Cross-linked Hyaluronate, Comprehensive ® Shoulder, Natural Nail ® System, and SternaLock ® System. Gel-One ® is a registered trademark of Seikagaku Corporation. Our ROSA ® Robot is also utilized in shoulder procedures.
CMFT products represented 21 percent of our S.E.T. product category net sales in 2025.‌ Our significant S.E.T. brands include the JuggerKnot ® Soft Anchor System, Gel-One ® Cross-linked Hyaluronate, Gorilla ® Ankle Fracture Plating System, Comprehensive ® Shoulder, Natural Nail ® System, and SternaLock ® System. Gel-One ® is a registered trademark of Seikagaku Corporation.
Team Member Inclusion Our team member inclusion efforts are intended to identify, attract and retain talent for our business. We monitor and benchmark our team member demographics at all levels of the organization. Our eight global employee resource groups (“ERGs”) continue to have substantial participation with membership representing approximately 15 percent of our workforce.
Team Member Inclusion Our team member inclusion efforts are intended to identify, attract and retain talent for our business. Our eight global employee resource groups (“ERGs”) are open to all team members and have substantial participation with membership representing approximately 15 percent of our workforce.
TECHNOLOGY & DATA, BONE CEMENT AND SURGICAL Through our Technology & Data, Bone Cement and Surgical product category, we market a collective suite of our products and technologies as the ZBEdge ® Platform.
Our ROSA ® Robot is also utilized in shoulder procedures. TECHNOLOGY & DATA, BONE CEMENT AND SURGICAL Through our Technology & Data, Bone Cement and Surgical product category, we market a collective suite of our products and technologies as the ZBEdge ® Platform.
We are also subject to foreign trade controls 7 administered by certain U.S. government agencies, including the Bureau of Industry and Security within the Commerce Department and the Office of Foreign Assets Control within the Treasury Department (“OFAC”). In addition, exported medical products are subject to the regulatory requirements of each country to which the medical product is exported.
We are also subject to foreign trade controls administered by certain U.S. government agencies, including the Bureau of Industry and Security within the Commerce Department and the Office of Foreign Assets Control within the Treasury Department (“OFAC”).
Knee replacement surgeries include first-time, or primary, joint replacement procedures and revision procedures for the replacement, repair or enhancement of an implant or component from a previous procedure.
KNEES Total knee replacement surgeries typically include a femoral component, a patella (knee cap), a tibial tray and an articular surface (placed on the tibial tray). Knee replacement surgeries include first-time, or primary, joint replacement procedures and revision procedures for the replacement, repair or enhancement of an implant or component from a previous procedure.
The U.S. accounted for approximately 95 percent of net sales in this region in 2024. The U.S. sales force consists of a combination of employees and independent sales agents, most of whom sell products exclusively for Zimmer Biomet. The sales force in the U.S. receives a commission on product sales and is responsible for many operating decisions and costs.
The U.S. accounted for approximately 95 percent of net sales in this region in 2025. The U.S. sales force historically has consisted of a combination of employees and independent sales agents, most of whom sell products exclusively for Zimmer Biomet.
Tornos was appointed President and Chief Executive Officer and a member of the Board of Directors in August 2023. Previously, he served as the Company’s Chief Operating Officer since March 2021, as Group President, Global Businesses and the Americas from December 2019 until March 2021, and as Group President, Orthopedics from joining the Company in November 2018 until December 2019.
Previously, he served as the Company’s Chief Operating Officer since March 2021, as Group President, Global Businesses and the Americas from December 2019 until March 2021, and as Group President, Orthopedics from joining the Company in November 2018 until December 2019. Prior to joining Zimmer Biomet, Mr.
(“LVB”), the parent company of Biomet, Inc. (“Biomet”), and LVB and Biomet became our wholly-owned subsidiaries. In connection with the merger, we changed our name from Zimmer Holdings, Inc. to Zimmer Biomet Holdings, Inc. On March 1, 2022, we completed the spinoff of our spine and dental businesses into a new public company, ZimVie Inc. (“ZimVie”).
(“LVB”), the parent company of Biomet, Inc. (“Biomet”), and LVB and Biomet became our wholly-owned subsidiaries. In connection with the merger, we changed our name from Zimmer Holdings, Inc. to Zimmer Biomet Holdings, Inc.
Tornos spent 11 years with Johnson & Johnson in positions of increasing responsibility. He has also served as a member of the board of directors at PHC Holdings Corporation since September 2021. Mr. Bezjak was appointed President, Americas in September 2023. As President, Americas, he oversees all commercial, downstream marketing and distribution activities in North America and Latin America. Mr.
Tornos spent 11 years with Johnson & Johnson in positions of increasing responsibility. He has also served as a member of the board of directors at PHC Holdings Corporation since September 2021. Mr.
The UK, in the meantime, continues to allow products meeting the current EU regulations to be marketed through June 2028 for EU MDD and EU Active Implantable Medical Devices or through June 2030 for EU MDR devices.
These SIs will form part of the new medical device regulatory framework (the “UK MDR”) following its exit from the European Union. The UK, in the meantime, continues to allow products meeting the current EU regulations to be marketed through June 2028 for EU MDD and EU Active Implantable Medical Devices or through June 2030 for EU MDR devices.
Upadhyay was appointed Chief Financial Officer and Executive Vice President - Finance, Operations and Supply Chain in August 2023. Previously, he served as our Executive Vice President and Chief Financial Officer since joining the Company in July 2019. Prior to joining Zimmer Biomet, Mr.
Thornal held several roles of increasing responsibility at Stryker Corp. from 2004 to 2014 in sales, marketing, and business development. Mr. Upadhyay was appointed Chief Financial Officer and Executive Vice President - Finance, Operations and Supply Chain in August 2023. Previously, he served as our Executive Vice President and Chief Financial Officer since joining the Company in July 2019.
We are broadening our offerings in certain of our product categories and exploring new technologies, including artificial intelligence and machine learning, with possible applications in multiple areas. Our primary research and development facility is located in Warsaw, Indiana. We have other research and development personnel based in, among other places, Canada, China, France, Switzerland and other U.S. locations.
We are broadening our offerings in certain of our product categories and exploring new technologies, including artificial intelligence and machine learning, with possible applications in multiple areas. Our primary research and development facilities are located in Warsaw, Indiana; Montreal, Quebec, Canada; Denver, Colorado; Jacksonville, Florida; Austin, Texas; Zug, Switzerland and Beijing, China.
Name Age Position 10 Ivan Tornos 49 President and Chief Executive Officer Mark Bezjak 50 President, Americas Rachel Ellingson 55 Senior Vice President and Chief Administrative Officer Chad Phipps 53 Senior Vice President, General Counsel and Secretary Paul Stellato 50 Vice President, Controller and Chief Accounting Officer Suketu Upadhyay 55 Chief Financial Officer and Executive Vice President - Finance, Operations and Supply Chain Wilfred van Zuilen 55 Group President, Europe, Middle East and Africa Lori Winkler 63 Senior Vice President, Chief Human Resources Officer Sang Yi 62 Group President, Asia Pacific Mr.
Name Age Position Ivan Tornos 50 Chairman, President and Chief Executive Officer Jehanzeb Noor 44 Senior Vice President, Chief Strategy, Business Development, Innovation and Transformation Officer Chad Phipps 54 Senior Vice President, Chief Legal and Corporate Affairs Officer and Secretary Paul Stellato 51 Vice President, Controller and Chief Accounting Officer Kevin Thornal 52 Group President, Global Businesses and the Americas 10 Suketu Upadhyay 56 Chief Financial Officer and Executive Vice President - Finance, Operations and Supply Chain Wilfred van Zuilen 56 Group President, Europe, Middle East and Africa Lori Winkler 64 Senior Vice President, Chief Human Resources Officer Sang Yi 63 Group President, Asia Pacific Mr.
Phipps was appointed Senior Vice President, General Counsel and Secretary in May 2007. He has global responsibility for the Company’s Legal Affairs and he serves as Secretary to the Board of Directors. Mr. Phipps also oversees the Company’s Government Affairs activities. Previously, Mr. Phipps served as Associate General Counsel and Corporate Secretary from December 2005 to May 2007.
He has global responsibility for the Company’s Legal Affairs and he serves as Secretary to the Board of Directors. Mr. Phipps also oversees the Company’s compliance, communications, corporate social responsibility and government affairs activities. Previously, Mr.
We protect our proprietary rights through a variety of methods, including confidentiality agreements and proprietary information agreements with suppliers, employees, consultants and others who may have access to proprietary information.
We protect our proprietary rights through a variety of methods, including confidentiality agreements and proprietary information agreements with suppliers, employees, consultants and others who may have access to proprietary information. We own or control through licensing arrangements over 6,000 issued patents and patent applications throughout the world that relate to aspects of the technology incorporated in many of our products.
The first piece of the Statutory Instrument (“SI”) for post-market surveillance requirements was released in January 2025 with further SIs planned to be released later in 2025 and in 2026. These SIs will form part of the new medical device regulatory framework (the “UK MDR”) following its exit from the European Union.
The UK additionally is in the process of creating secondary legislation to implement the future medical device regulations. The first piece of the Statutory Instrument (“SI”) for post-market surveillance requirements was released in January 2025 with further SIs planned to be released later in 2026 and in 2027.
Government Regulation and Compliance Our operations, products and customers are subject to extensive government regulation by numerous government agencies, both within and outside the U.S.
We expect to continue to identify innovative technologies, which may include acquiring complementary products or businesses, establishing technology licensing arrangements or strategic alliances. 6 Government Regulation and Compliance Our operations, products and customers are subject to extensive government regulation by numerous government agencies, both within and outside the U.S.
Products currently certified per the MDD regulations must be certified to the new EU MDR regulation prior to December 2027 or December 2028, depending upon the device’s risk class. The UK additionally is in the process of creating secondary legislation to implement the future medical device regulations.
The EU MDR took effect in May 2021, replacing the European Medical Device Directive (the “MDD”). The EU MDR imposes significant additional premarket and post-market requirements. Products currently certified per the MDD regulations must be certified to the new EU MDR regulation prior to December 2027 or December 2028, depending upon the device’s risk class.
Since most of our sales occur at the time of an elective procedure, we generally do not have firm orders.
Since most of our sales occur at the time of an elective procedure, we generally do not have firm orders. Products Our products include orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; CMFT products; bone cement; surgical products; and a suite of integrated digital and robotic technologies.
Approximately 7,000 employees are located within the U.S. and approximately 10,000 employees are located outside of the U.S., primarily throughout Europe and in Japan and China. We have approximately 7,000 employees dedicated to manufacturing our products worldwide. Our mission is to alleviate pain and improve the quality of life for people around the world.
Human Capital As of December 31, 2025, we employed approximately 17,000 employees worldwide, including approximately 2,000 employees dedicated to research and development. Approximately 7,000 employees are located within the U.S. and approximately 10,000 employees are located outside of the U.S., primarily throughout Europe and in Japan and China.
Our commitment to patients shapes all day-to-day decisions at Zimmer Biomet. To be able to accomplish our mission, we have established guiding principles. These guiding principles are central to our human capital management policies and practices.
These guiding principles are central to our human capital management policies and practices.
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The transaction was 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.
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We recently commenced a multi-year initiative to convert substantial portions of our U.S. sales force from their status as independent sales agents to becoming our employees. The sales force in the U.S. receives a commission on product sales and is responsible for many operating decisions and costs.
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Products Our products include orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; CMFT products; surgical products; and a suite of integrated digital and robotic technologies. 5 KNEES Total knee replacement surgeries typically include a femoral component, a patella (knee cap), a tibial tray and an articular surface (placed on the tibial tray).
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We have other research and development personnel based in other locations both within and outside the U.S. As of December 31, 2025, we employed approximately 2,000 research and development employees worldwide.
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As of December 31, 2024, we employed approximately 2,000 research and development employees worldwide. 6 We expect to continue to identify innovative technologies, which may include acquiring complementary products or businesses, establishing technology licensing arrangements or strategic alliances.
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We have approximately 6,000 employees dedicated to manufacturing our products worldwide. 9 Our mission is to alleviate pain and improve the quality of life for people around the world. Our commitment to patients shapes all day-to-day decisions at Zimmer Biomet. To be able to accomplish our mission, we have established guiding principles.
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We own or control through licensing arrangements over 6,000 issued patents and patent applications throughout the world that relate to aspects of the technology incorporated in many of our products. 9 Human Capital As of December 31, 2024, we employed approximately 17,000 employees worldwide, including approximately 2,000 employees dedicated to research and development.
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Tornos was appointed Chairman of the Board in May 2025. He was appointed President and Chief Executive Officer and a member of the Board of Directors in August 2023.
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Bezjak joined Zimmer Biomet in April of 2008 as Director of Corporate Sales and has held roles of increasing importance within the Company, most recently serving as President, North America, since 2021. Prior to his work at Zimmer Biomet, Mr.
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Noor was appointed Senior Vice President, Chief Strategy, Business Development, Innovation and Transformation Officer in January 2026, after being appointed Senior Vice President, Chief Strategy, Innovation and Business Development Officer in March 2025.
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Bezjak held multiple roles with Teleflex Incorporated ranging from a regional sales representative to Director of Strategic Accounts from 2000 to 2008. He also held various sales representative roles with Michelin Tire Company from 1997 to 2000. Ms. Ellingson was appointed Senior Vice President and Chief Administrative Officer in May 2024.
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In his role, he is responsible for leading strategy development and execution; overseeing all facets of M&A; identifying short- and long-term organic and inorganic growth opportunities; and leading enterprise-wide transformation. In addition, he oversees the research and product development organizations, inclusive of new product and service development, partnership and ecosystem development and platform technologies.
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Prior to that, she served as Senior Vice President and Chief Strategy Officer since April 2018 and was designated as an executive officer in January 2021. Prior to joining Zimmer Biomet, Ms. Ellingson served as a member of the executive leadership team of St.
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Prior to joining Zimmer Biomet in March 2025, Mr. Noor served as President and Managing Director for Europe, Africa and Asia at Trivium starting in August 2022 and was CEO of Smiths Medical from July 2019 through January 2022. He also previously held roles of increasing responsibility at Amcor, McKinsey (Partner), Ford Motor Company and Constellation Energy Commodities Group. Mr.
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Jude Medical in positions of increasing responsibility from 2012 until 2017, most recently as Vice President, Corporate Strategy from 2015 until 2017. Before joining St. Jude Medical, Ms. Ellingson served as Vice President, Business Development and Investor Relations at AGA Medical Corporation. Prior to joining AGA Medical, Ms.
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Noor holds a Master of Science with a focus on Product Design and Operations Management, a Bachelor of Science in Finance and a Bachelor of Science in Mechanical Engineering, all from the Massachusetts Institute of Technology. Mr. Phipps was appointed Senior Vice President, Chief Legal and Corporate Affairs Officer and Secretary in January 2026.
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Ellingson had more than 15 years of experience in investment banking, rising to the position of Managing Director, Medical Technology Investment Banking with Bank of America. She has served as a member of the board of directors of Biolife Solutions, Inc. since April 2021 and serves on their audit and compensation committees. Mr.
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Phipps served as the Company’s Senior Vice President, General Counsel and Secretary from May 2007 to January 2026 and as Associate General Counsel and Corporate Secretary from December 2005 to May 2007. He joined the Company in September 2003 as Associate Counsel and Assistant Secretary.
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Thornal was appointed Group President, Global Businesses and the Americas in July 2025. Prior to joining the Company, Mr. Thornal served as President and Chief Executive Officer of Nevro Corp. from April 2023, and as a member of its Board of Directors from May 2023, until the completion of its acquisition by Globus Medical, Inc. in April 2025.
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He previously served as the Group President of Global Diagnostic Solutions at Hologic, Inc. (“Hologic”) from April 2022 to April 2023. Mr. Thornal served in several leadership positions with increasing levels of responsibility at Hologic from 2014 to April 2023. Prior to Hologic, Mr.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur use of artificial intelligence and machine learning in our infrastructure and products exposes us to new threats, risks and uncertainties, including with respect to changing laws and regulations regarding the use of such technologies.
Biggest changeFurther, our use of artificial intelligence and machine learning in our infrastructure and products exposes us to a variety of threats, risks and uncertainties, including with respect to changing laws and regulations regarding the use of such technologies; the risks of inaccuracies, errors and interruptions affecting business processes supported by artificial intelligence; the risks of inaccuracies, errors and interruptions to our products and services using artificial intelligence, which could result in harm to patients or other adverse outcomes; and the variety of risks associated with any other use of information technology, including risks relating to data privacy and access, interruption, compliance, implementation and other factors.
Our current and future increased level of debt could, among other things: • require us to dedicate a large portion of our cash flow from operations to the servicing and repayment of our debt, thereby reducing funds available for working capital, capital expenditures, research and development expenditures and other general corporate requirements; • limit our ability to obtain additional financing to fund future working capital, capital expenditures, research and development expenditures and other general corporate requirements; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • restrict our ability to make strategic investments, collaborations, acquisitions or dispositions or to exploit business opportunities; • place us at a competitive disadvantage compared to our competitors that have less debt; • adversely affect our credit rating, with the result that the cost of servicing our indebtedness might increase and our ability to obtain surety bonds could be impaired; • adversely affect the market price of our common stock; and • limit our ability to apply proceeds from a future offering or asset sale to purposes other than the servicing and repayment of debt.
Our current and future increased level of debt could, among other things: • require us to dedicate a large portion of our cash flow from operations to the servicing and repayment of our debt, thereby reducing funds available for working capital, capital expenditures, research and development expenditures and other general corporate requirements; • limit our ability to obtain additional financing to fund future working capital, capital expenditures, research and development expenditures and other general corporate requirements; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • restrict our ability to make strategic investments, collaborations, acquisitions or dispositions or to exploit business opportunities; • place us at a competitive disadvantage compared to our competitors that have less debt; • adversely affect our credit rating, with the result that the cost of servicing our indebtedness might increase and our ability to obtain surety bonds could be impaired; • adversely affect the market price of our common stock; and 20 • limit our ability to apply proceeds from a future offering or asset sale to purposes other than the servicing and repayment of debt.
We may have additional tax liabilities as a result of examinations and audits. 19 We are subject to income taxes in the U.S. and many foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain.
We may have additional tax liabilities as a result of examinations and audits. We are subject to income taxes in the U.S. and many foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain.
Any 22 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, financial condition and results of operations. Our products and operations are also often subject to the rules of industrial standards bodies, such as the International Standards Organization.
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, financial condition and results of operations. Our products and operations are also often subject to the rules of industrial standards bodies, such as the International Standards Organization.
Recent legal and regulatory changes may affect our ability to enforce post-termination obligations from certain employees and third parties with respect to non-competition, non-solicitation and protection of confidential information, which may negatively impact our ability to retain employees and third-party distributors and to protect our information and relationships with our customers. Competition for talent in our business is significant.
Recent legal and regulatory changes may affect our ability to enforce post-termination obligations from certain employees and third parties with respect to non-competition, non-solicitation and protection of confidential information, which may negatively impact our ability to retain key employees and third-party distributors and to protect our information and relationships with our customers. Competition for talent in our business is significant.
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 that may apply to us, both because our operations are located in those countries and/or because we provide products and services to customers in those countries.
The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving as countries continue to adopt 24 privacy and data security laws that may apply to us, both because our operations are located in those countries and/or because we provide products and services to customers in those countries.
We may also not be able to detect unauthorized uses or take timely and effective steps to remedy unauthorized conduct. To prevent or respond to unauthorized uses of our intellectual property, we might be required to engage in costly and time-consuming litigation or other proceedings and we may not ultimately prevail.
We may also not be able to detect unauthorized uses or take timely and effective steps to remedy unauthorized conduct. To prevent or respond to unauthorized uses of our 25 intellectual property, we might be required to engage in costly and time-consuming litigation or other proceedings and we may not ultimately prevail.
In addition, some of our products and services incorporate software or information technology that collects data regarding patients and patient therapy, and some software and other products we provide to customers connect to our and third 16 party systems for maintenance and other purposes.
In addition, some of our products and services incorporate software or information technology that collects data regarding patients and patient therapy, and some software and other products we provide to customers connect to our and third party systems for maintenance and other purposes.
Rising political tensions could reduce trade, investment and other economic activities between or among these economies. Any of these factors could have a material adverse effect on our business, prospects, financial condition and results of operations.
Rising political tensions could reduce trade, investment and other 22 economic activities between or among these economies. Any of these factors could have a material adverse effect on our business, prospects, financial condition and results of operations.
We also face competition from pharmaceutical and other therapies that may be more attractive than, or have other benefits over, our products, or 13 that could affect the frequency, progressions or symptoms of diseases and conditions that our products treat.
We also face competition from pharmaceutical and other therapies that may be more attractive than, or have other benefits over, our products, or that could affect the frequency, progressions or symptoms of diseases and conditions that our products treat.
Pricing pressure continues due to consolidation among healthcare providers, trends toward managed care, the shift toward governments becoming the primary payors of healthcare expenses, reductions in reimbursement levels and 18 government laws and regulations relating to reimbursement and pricing generally.
Pricing pressure continues due to 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.
The global supply chain has been and continues to be negatively impacted by a variety of macro factors which have, in part, resulted in challenges to meet end market 15 demand in some instances.
The global supply chain has been and continues to be negatively impacted by a variety of macro factors which have, in part, resulted in challenges to meet end market demand in some instances.
Our products may become obsolete, customers may not buy our products, and our revenue and profitability may decline without the timely introduction of new products and enhancements, due to changes in markets, or due to changes in applicable standards of care.
Our products may become obsolete, customers may not buy our products, and our revenue and profitability may decline without the timely introduction of new products and enhancements, due to changes in markets, changes in our strategy, or due to changes in applicable standards of care.
We have experienced such interruptions previously (including in connection with our enterprise resource planning system implementation which negatively impacted distribution of our products), and we may experience such interruptions in the future.
We have experienced such interruptions previously (including in connection with our enterprise resource planning system implementation which negatively impacted distribution of our products in 2024), and we may experience such interruptions in the future.
Violations of foreign laws or regulations could result in fines; criminal sanctions against us, our directors, officers, employees, agents or distributors; prohibitions or restrictions relating to the conduct of our business; and damage to our reputation. Furthermore, political tensions between the U.S., Canada, Mexico, China and certain other countries have escalated in recent years.
Violations of foreign laws or regulations could result in fines; criminal sanctions against us, our directors, officers, employees, agents or distributors; prohibitions or restrictions relating to the conduct of our business; and damage to our reputation. Furthermore, political tensions between the U.S., Canada, Mexico, China, Russia, Venezuela and certain other countries have escalated in recent years.
For more information on our restructuring programs, see Note 5 to our consolidated financial statements. If we fail to achieve some or all of the expected benefits of our restructuring programs, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.
For more information on our restructuring programs, see Note 4 to our consolidated financial statements. If we fail to achieve some or all of the expected benefits of our restructuring programs, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.
There were no impairment charges during the years ended December 31, 2024 and 2023, but if the operating performance at one or more of our reporting units significantly declines, including if competing or alternative technologies or pharmacological treatments, emerge, if market conditions or future cash flow estimates for one or more of our businesses decline, or as a result of restructuring initiatives pursuant to which we reorganize our reporting units, we could be required to record additional impairment charges.
There were no impairment charges during the years ended December 31, 2025 and 2024, 21 but if the operating performance at one or more of our reporting units significantly declines, including if competing or alternative technologies or pharmacological treatments, emerge, if market conditions or future cash flow estimates for one or more of our businesses decline, or as a result of restructuring initiatives pursuant to which we reorganize our reporting units, we could be required to record additional impairment charges.
Our competition may have greater financial, marketing, technical and other resources than us; respond more quickly to new or emerging technologies; undertake more extensive marketing campaigns; operate more effective planning, manufacturing, sales and distribution channels; adopt more aggressive pricing policies; or be more successful in attracting potential customers, employees and strategic partners.
Our competition may have, and at times does have, greater financial, marketing, technical and other resources than us; respond more quickly to new or emerging technologies; undertake more extensive marketing campaigns; operate more effective planning, manufacturing, sales and distribution channels; adopt more aggressive pricing policies; or be more successful in attracting potential customers, employees and strategic partners.
Our acquisitions involve numerous risks, including: • unforeseen difficulties in integrating personnel and sales forces, operations, manufacturing, logistics, research and development, information technology, compliance, vendor management, communications, purchasing, accounting, marketing, administration and other systems and processes; • difficulties harmonizing and optimizing quality systems and operations; • diversion of financial and management resources from existing operations; • unforeseen difficulties related to entering markets for which or geographic regions where we do not have prior experience; • potential loss of key employees; • unforeseen risks and liabilities associated with businesses acquired, including any unknown vulnerabilities in acquired technology, compromises of acquired data or noncompliance with data privacy requirements; and/or • inability to generate sufficient revenue or realize sufficient cost savings to offset acquisition or investment costs.
Our acquisitions involve numerous risks, including: • unforeseen difficulties in integrating personnel and sales forces, operations, manufacturing, logistics, research and development, information technology, compliance, vendor management, communications, purchasing, accounting, marketing, administration and other systems and processes; • difficulties harmonizing and optimizing quality systems and operations; • diversion of financial and management resources from existing operations; • unforeseen difficulties related to entering markets for which, or geographic regions where, we do not have prior experience; • potential loss of key employees and key third parties; • unforeseen risks and liabilities associated with businesses acquired, including any unknown vulnerabilities in acquired technology, compromises of acquired data or noncompliance with laws and regulations; and/or • inability to generate sufficient revenue or realize sufficient cost savings to offset acquisition or investment costs.
Changes to tariffs, trade restrictions and protection measures applicable to trade with certain countries, trade in certain types of goods, or otherwise; new import or export requirements; changes to trade agreements; new or increased tariffs, trade embargoes, sanctions and other trade barriers may prevent us from shipping products to or from a particular market, restrict our access to certain sources of raw materials and other inputs, increase our operating costs and disrupt our ability to collect payment for our products and services in particular markets.
Changes to tariffs, trade restrictions and protection measures applicable to trade with certain countries, trade in certain types of goods, or otherwise; new import or export requirements; changes to trade agreements; new or increased tariffs, trade embargoes, sanctions and other trade barriers, have in the past and may in the future prevent us from shipping products to or from a particular market, restrict our access to certain sources of raw materials and other inputs, increase our operating costs and disrupt our ability to collect payment for our products and services in particular markets.
Tariffs, trade restrictions and other trade measures could adversely affect our business and financial results. We operate in multiple countries and maintain a complex global supply chain and distribution network which exposes us to a variety of risks from U.S. and other countries’ international trade and tariff policies.
Tariffs, trade restrictions and other trade measures have adversely affected, and could continue to adversely affect, our business and financial results. We operate in multiple countries and maintain a complex global supply chain and distribution network which exposes us to a variety of risks from U.S. and other countries’ international trade and tariff policies.
Demand for our products may change, in certain cases, in ways we may not anticipate because of evolving customer needs, changing demographics, changing industry growth rates, declines in the musculoskeletal implant market, the introduction of competing products and technologies, the emergence of alternative treatment methods, evolving surgical philosophies and evolving industry standards.
Demand for our products may change, in certain cases, in ways we may not anticipate because of evolving customer needs, changing demographics, changing industry growth rates, declines in the musculoskeletal implant market, the introduction of competing products and technologies, changes to our strategy, the emergence of alternative treatment methods, evolving surgical philosophies and evolving industry standards.
In addition, the interest rates applicable to certain of our debt obligations are based on a fluctuating rate of interest determined by reference to the Secure Overnight Financing Rate (“SOFR”) or other externally-determined rates. SOFR and such other rates have increased from recent lows, which has increased our cost of borrowing.
In addition, the interest rates applicable to certain of our debt obligations are based on a fluctuating rate of interest determined by reference to the Secure Overnight Financing Rate (“SOFR”) or other externally-determined rates. SOFR and such other rates have increased from pandemic-era lows, which has increased our cost of borrowing.
As of December 31, 2024, our debt service principal obligations (excluding interest, leases and equipment notes), during the next 12 months are expected to be $0.9 billion. As a result of the increase in our debt, demands on our cash resources have increased; such demand would further amplify if we fund future mergers and acquisitions using debt financing.
As of December 31, 2025, our debt service principal obligations (excluding interest, leases and equipment notes), during the next 12 months are expected to be $0.6 billion. As a result of the increase in our debt, demands on our cash resources have increased; such demand would further amplify if we fund future mergers and acquisitions using debt financing.
Our international operations are, and will continue to be, subject to a number of risks and potential costs, including: • changes in foreign medical reimbursement policies and programs; • differences in and changes to foreign regulatory requirements, such as more stringent requirements for regulatory clearance of products; • differing local product preferences, local product requirements and “buy local” initiatives; • fluctuations in foreign currency exchange rates; • the effects of inflation, including the effects of different rates of inflation in different countries, on our costs and expenses, and the costs of our products; • diminished protection of intellectual property in some countries outside of the U.S.; • foreign exchange controls that might prevent us from repatriating cash earned in countries outside the U.S.; • data privacy and cybersecurity requirements and labor relations laws that may add to the complexity and costs of our operations or require changes to our products or business processes; • extraterritorial effects of U.S. laws such as the FCPA; • effects of foreign anti-corruption laws, such as the United Kingdom Bribery Act; • difficulty in staffing and managing foreign operations; • labor force instability; • increased tax liabilities under foreign tax laws or changes thereto; and • political, social and economic instability and uncertainty, including wars, other conflict and sovereign debt issues.
Our international operations are, and will continue to be, subject to a number of risks and potential costs, including: • changes in foreign medical reimbursement policies and programs; • inconsistent and unpredictable demand for our products, especially in developing markets; • differences in and changes to foreign regulatory requirements, such as more stringent requirements for regulatory clearance of products; • differing local product preferences, local product requirements and “buy local” initiatives; • fluctuations in foreign currency exchange rates; • the effects of inflation, including the effects of different rates of inflation in different countries, on our costs and expenses, and the costs of our products; • diminished protection of intellectual property in some countries outside of the U.S.; • foreign exchange controls that might prevent us from repatriating cash earned in countries outside the U.S.; • data privacy and cybersecurity requirements, labor relations laws, sustainability disclosure requirements and other laws that add to the complexity and costs of our operations or require changes to our products or business processes; • extraterritorial effects of U.S. laws such as the FCPA; • effects of foreign anti-corruption laws, such as the United Kingdom Bribery Act; • difficulty in staffing and managing foreign operations; • labor force instability; • increased tax liabilities under foreign tax laws or changes thereto; and • political, social and economic instability and uncertainty, including wars, other conflict and sovereign debt issues.
Competition within our markets is primarily on the basis of technology, innovation, quality, reputation, customer service and pricing. In markets outside of the U.S., other factors influence competition as well, including local distribution systems, complex regulatory environments, differing medical philosophies and differing product preferences.
Competition within our markets is primarily on the basis of technology, innovation, quality, reputation, customer service and pricing. In markets outside of the U.S., other factors influence competition as well, including local distribution systems, complex regulatory environments, differing medical philosophies and differing product preferences, including policy-driven preferences for local manufacturers.
Damage to one or more facilities or related operations from weather or natural disaster-related events, vulnerabilities in technology, cyber-attacks against our information systems or the information systems of our business partners (such as ransomware attacks), issues in manufacturing arising from failure to follow specific internal protocols and procedures, compliance concerns relating to the Quality System Regulation (“QSR”) and Good Manufacturing Practice requirements, equipment breakdown or malfunction, reductions in operations and/or worker absences, trade impediments, international sanctions, wars or other factors could adversely affect the ability to manufacture and distribute our products.
Damage to one or more facilities or related operations from weather or natural disaster-related events, vulnerabilities in technology, cyber attacks against our or our business partners’ information systems, issues in manufacturing arising from failure to follow specific internal protocols and procedures, compliance concerns relating to the Quality System Regulation (“QSR”) and Good Manufacturing Practice requirements, equipment breakdown or malfunction, reductions in operations and/or worker absences, trade impediments, international sanctions, wars or other factors has in the past adversely affected, and could in the future adversely affect, the ability to manufacture and distribute our products.
Future material impairments in the carrying value of our intangible assets, including goodwill, would negatively affect our operating results. Goodwill and intangible assets represent a significant portion of our assets. At December 31, 2024, we had $9.0 billion in goodwill and $4.6 billion of intangible assets.
Future material impairments in the carrying value of our intangible assets, including goodwill, would negatively affect our operating results. Goodwill and intangible assets represent a significant portion of our assets. At December 31, 2025, we had $9.9 billion in goodwill and $4.7 billion of intangible assets.
We are subject to laws and regulations that govern the collection, use, disclosure, transfer, storage, location, disposal, processing and protection of health-related, personal and other information. The FDA has issued guidance to which we are subject concerning data security for medical devices.
These data and information-focused activities carry additional risk. We are subject to laws and regulations that govern the collection, use, disclosure, transfer, storage, location, disposal, processing and protection of health-related, personal and other information. The FDA has issued guidance to which we are subject concerning data security for medical devices.
Failure to comply with U.S. and international data protection laws and regulations, and the disclosure of any data or related breach, could result in government enforcement actions (which could include substantial civil and/or criminal penalties and injunctive relief), private litigation and/or adverse publicity and could have a material adverse impact on our business, financial condition or results of operations. 23 Pending and future product liability claims and litigation could adversely impact our financial condition and results of operations and impair our reputation.
Failure to comply with U.S. and international data protection laws and regulations, and the disclosure of any data or related breach, could result in government enforcement actions (which could include substantial civil and/or criminal penalties and injunctive relief), private litigation and/or adverse publicity and could have a material adverse impact on our business, financial condition or results of operations.
Similarly, the Italian Public Administration has implemented a “Pay Back” law to obtain reimbursement from the medical device industry to contribute to government overspending on medical devices beginning in 2015, which assessments we have challenged, and a “Fund for the Government of Medical Devices” applicable to revenues relating to medical devices, large medical equipment and in vitro diagnostic devices commencing in 2024, which assessment we have also challenged.
Similarly, the Italian Public Administration implemented a “Pay Back” law to obtain reimbursement from the medical device industry to contribute to government overspending on medical devices beginning in 2015 and a “Fund for the Government of Medical Devices” applicable to revenues relating to medical devices, large medical equipment and in vitro diagnostic devices commencing in 2024.
In the event of an interruption in manufacturing or involving a critical supplier, we may be unable to move quickly to alternate means of producing or acquiring affected products or to meet customer demand, and alternative sources of supply may not be adequate to accommodate sudden increases in demand.
If we suffer, or a critical supplier suffers, a manufacturing interruption, we may be unable to move quickly to alternate means of producing or acquiring affected products or to meet customer demand, and alternative sources of supply may not be adequate to accommodate sudden increases in demand.
In addition, some of our products and services incorporate software or information technology that processes patient health data for treatment, maintenance and other purposes. Further, we obtain and process personal data related to our employees, individual business partners (such as physicians and consultants), and website visitors located around the world. These data and information-focused activities carry additional risk.
We process personal and personal health data in our business, and certain of our products and services incorporate software or information technology that processes patient health data for treatment, maintenance and other purposes. Further, we obtain and process personal data related to our employees, individual business partners (such as physicians and consultants), and website visitors located around the world.
In the ordinary course of business, we are the subject of product liability lawsuits alleging that component failures, manufacturing flaws, design defects or inadequate disclosure of product-related risks or product-related information resulted in an unsafe condition or injury to patients.
In the ordinary course of business, we are the subject of product liability lawsuits alleging that component failures, manufacturing flaws, design defects or inadequate disclosure of product-related risks or product-related information resulted in an unsafe condition or injury to patients. We are currently defending a number of product liability lawsuits and claims related to various products.
Additional disruptions, delays or deficiencies in the transition, design, and implementation of this ERP system, particularly any disruptions, delays or deficiencies that impact our operations, could in the future have a material adverse effect on our business.
Additional disruptions, delays or deficiencies in the transition, design, and implementation of our ERP systems, particularly any disruptions, delays or deficiencies that impact our operations, could again in the future have a material adverse effect on our business and financial condition and results of financial operations.
We incurred substantial indebtedness in connection with previous mergers and acquisitions, and may incur substantial additional indebtedness in connection with future mergers and acquisitions. At December 31, 2024, our total indebtedness was $6.2 billion.
We incurred substantial indebtedness in connection with previous mergers and acquisitions, and may incur substantial additional indebtedness in connection with future mergers and acquisitions. At December 31, 2025, our total indebtedness was $7.5 billion.
We cannot predict how these developments will impact us, and existing or future tariffs and trade restrictions could have a material adverse effect on our business and financial results.
We cannot predict how these dynamic developments will impact us or the bilateral and multilateral trade agreements upon which we rely. Existing or future tariffs and trade restrictions could have a material adverse effect on our business and financial results.
If we fail to comply with data privacy and security laws and regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected. We process personal and personal health data in our business, particularly through our ZBEdge ® ecosystem.
If we fail to comply with data privacy and security laws and regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected.
If key participants in government healthcare systems reduce the reimbursement levels for our products, including through regulatory changes, elections and other political changes, our business, financial condition, results of operations and cash flows may be adversely affected.
If key participants in government healthcare systems reduce the reimbursement levels for our products, including through regulatory changes, elections and other political changes, our business, financial condition, results of operations and cash flows may be adversely affected. 19 Natural disasters, or legal, regulatory or market measures to address natural disasters, could materially adversely affect our business and financial results.
Therefore, despite our efforts, we cannot assure that cybersecurity incidents or data breaches will not occur or that technology or information system issues will not arise in the future.
Cyber attacks are becoming more sophisticated, frequent and adaptive, and therefore, despite our efforts, we cannot assure that cybersecurity incidents or data breaches will not occur or that technology or information system issues will not arise in the future.
In cases where our product is not selected in VBP, sales of that product are substantially impacted. “Buy local” initiatives have in the past resulted in, and could in the future result in, reduced demand for our products, as well as reduced margins on covered devices and products, required renegotiation of distributor arrangements and incurrence of inventory-related charges.
“Buy local” initiatives have in the past resulted in, and could in the future result in, reduced demand for our products, as well as reduced margins on covered devices and products, required renegotiation of distributor arrangements and incurrence of inventory-related charges.
The effects of emerging, expanding and new conflicts, such as a possible expansion of the Russian-Ukrainian conflict, a possible expansion of conflicts in the Middle East, or a possible conflict involving China and Taiwan, may not be limited to the specific markets involved.
The effects of emerging, expanding and new conflicts, such as a possible expansion of the Russian-Ukrainian conflict, conflicts in the Middle East, or a possible conflict involving China and Taiwan, may not be limited to the specific markets involved. Sanctions and other civil, political and economic effects of such conflicts are likely to have adverse impacts upon us.
Product liability lawsuits and claims, safety alerts or product recalls, regardless of their ultimate outcome, could have a material adverse effect on our business and reputation and on our ability to attract and retain customers.
Any product liability claim brought against us, with or without merit, can be costly to defend. Product liability lawsuits and claims, safety alerts or product recalls, regardless of their ultimate outcome, could have a material adverse effect on our business and reputation and on our ability to attract and retain customers.
Challenges integrating, transitioning and implementing a new enterprise resource planning ("ERP") system have adversely affected our business and operations, and may in the future have further adverse effects. As a result of technology initiatives, changes in our system platforms and the ongoing integration of business acquisitions, we have been consolidating and integrating the ERP systems that we operate.
As a result of technology initiatives, changes in our system platforms and the ongoing integration of business acquisitions, we have been consolidating and integrating the ERP systems that we operate.
Emerging opportunities, including those presented by the use of machine learning and artificial intelligence in our current and future products, devices and services are expected to present new, complex and potentially inconsistent legal and regulatory requirements across the various jurisdictions in which we operate.
Emerging opportunities, including those presented by the use of machine learning and artificial intelligence in our current and future products, devices and services are expected to present new, complex and potentially inconsistent legal and regulatory requirements across the various jurisdictions in which we operate. 23 Both before and after a product is commercially released, we have ongoing responsibilities under FDA regulations, the EU MDR, UK MDR and other national, regional, state and other requirements.
Changes in the terms and conditions of employment or engagement, such as the availability of remote and hybrid work programs, benefit and perquisite programs and engagement on an employee or independent contractor basis, may affect our ability to attract and retain key talent.
Changes in the terms and conditions of employment or engagement, such as the availability of remote and hybrid work programs, benefit and perquisite programs and engagement on an employee or independent contractor basis, may affect our ability to attract and retain key talent. 14 Effective succession planning for senior management, key employees and key third parties (including independent distributors and sales agents) is also important to our long-term success.
Failure to ensure orderly transitions involving senior management, key employees and key third parties, as well as inadequate transfer of knowledge, customer relationships and other know-how, could adversely affect our business and financial results. 14 Our restructuring programs may not be successful or we may not fully realize the expected cost savings and/or operating efficiencies from our restructuring initiatives.
Failure to ensure orderly transitions involving senior management, key employees and key third parties, as well as inadequate transfer of knowledge, customer relationships and other know-how, could adversely affect our business and financial results.
As a result, we may experience lost sales, which we may be unable to recover, loss of market share, which we may be unable to recapture, and/or harm to our reputation, which could adversely affect our business, financial condition and results of operations.
As a result, we may experience lost sales, which we may be unable to recover, loss of market share, which we may be unable to recapture, and/or harm to our reputation, which could adversely affect our business, financial condition and results of operations. 16 Challenges integrating, transitioning and implementing a new enterprise resource planning ("ERP") system have adversely affected our business and operations, and may in the future have further adverse effects.
Our business exposes us to potential product liability risks that are inherent in the design, manufacture and marketing of medical devices.
Pending and future product liability claims and litigation could adversely impact our financial condition and results of operations and impair our reputation. Our business exposes us to potential product liability risks that are inherent in the design, manufacture and marketing of medical devices.
Business interruptions and disruptions have adversely impacted, and may, either alone or in combination with other risks, in the future adversely impact, our business, results of operations and financial condition, the nature and extent of which impacts are uncertain and unpredictable.
Any significant breakdown, intrusion, breach, interruption, corruption or destruction of these systems could have a material adverse effect on our business and reputation and could materially adversely affect our results of operations and financial condition. 18 Business interruptions and disruptions have adversely impacted, and may, either alone or in combination with other risks, in the future adversely impact, our business, results of operations and financial condition, the nature and extent of which impacts are uncertain and unpredictable.
In addition, as a result of our adoption of remote work arrangements in many positions, a significant number of our employees who are able to work remotely are doing so, and malicious cyber actors may increase efforts targeting remote workers, which exposes us to additional cybersecurity risks.
In addition, as a result of our adoption of remote work arrangements in many positions, a significant number of our employees who are able to work remotely are doing so, which exposes us to additional cybersecurity risks. Our cybersecurity program, incident response efforts, business continuity procedures and disaster recovery planning may not be sufficient for all eventualities.
Given the uncertain nature of legal proceedings generally, we are not able in all cases to estimate the amount or range of loss that could result from an unfavorable outcome.
Given the uncertain nature of legal proceedings generally, we are not able in all cases to estimate the amount or range of loss that could result from an unfavorable outcome. We could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on our financial results in any particular period.
If the spinoff, or the subsequent divestiture of our retained interest in ZimVie, does not qualify for tax-free treatment for U.S. federal income tax purposes, the resulting tax liability to us, to our stockholders and to ZimVie stockholders could be substantial. 20 Global Operational Risks We conduct a significant amount of our sales and manufacturing activities outside of the U.S., which subjects us to additional business risks and may cause our profitability to decline due to increased costs.
If the spinoff, or the subsequent divestiture of our retained interest in ZimVie, does not qualify for tax-free treatment for U.S. federal income tax purposes, the resulting tax liability to us, to our stockholders and to ZimVie stockholders could be substantial.
We also have outsourced elements of our operations to third parties (including suppliers, customers and other business partners), and, as a result, we manage a number of third parties who may now or could in the future have access to our confidential information, including, but not limited to, intellectual property, proprietary business information and personal information of patients, team members and customers (collectively “Confidential Information”).
We also have outsourced elements of our operations to third parties (including suppliers, customers and other business partners), and, as a result, we manage a number of third parties who may now or could in the future have access to our confidential information, including, but not limited to, intellectual property, proprietary business information and personal information of patients, team members and customers (collectively “Confidential Information”). 17 Our information systems, and those of third parties with whom we contract, require an ongoing commitment of significant resources to maintain, protect and enhance existing systems and develop new systems to keep pace with continuing changes in information technology, evolving system and regulatory standards, changing threats and vulnerabilities, and the increasing need to protect data including patient, customer and Confidential Information.
We sell our products in more than 100 countries and derived approximately 42 percent of our net sales in 2024 from outside the U.S. We intend to continue to pursue growth opportunities in sales internationally, including in emerging markets, which could expose us to additional risks associated with international sales and operations.
We intend to continue to pursue growth opportunities in sales internationally, including in emerging markets, which could expose us to additional risks associated with international sales and operations.
We could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on our financial results in any particular period. 24 Risks Related to Our Organizational Documents and Jurisdiction of Incorporation Anti-takeover provisions in our organizational documents could delay or prevent a change of control.
Risks Related to Our Organizational Documents and Jurisdiction of Incorporation Anti-takeover provisions in our organizational documents could delay or prevent a change of control.
At the beginning of our third quarter of fiscal 2024, we began transitioning certain distribution and sales systems in the Americas to a new ERP system as part of a multi-year project. We experienced unanticipated challenges during the transition that disrupted our ability to fulfill customer orders during the second half of fiscal 2024.
For example, during 2024, we experienced unanticipated challenges during an Americas ERP transition that disrupted our ability to fulfill customer orders during the second half of fiscal 2024, which caused adverse consequences including disruption to our ability to distribute product, difficulty in meeting customer demand, productivity declines, delays in invoicing customers, increased ERP system costs and loss of customers and sales.
Additionally, the availability of designated European notified body services to certify compliance with the EU MDR requirements is limited, which may delay the marketing approval for some of our products under the EU MDR (and, potentially, the UK MDR). Furthermore, regulators strictly regulate the promotional claims that we may make about approved or cleared products.
Furthermore, regulators strictly regulate the promotional claims that we may make about approved or cleared products.
Removed
Effective succession planning for senior management, key employees and key third parties (including independent distributors and sales agents) is also important to our long-term success.
Added
Additionally, our customers’ needs often vary 13 depending on their sites of care, such as hospitals, hospital systems, ambulatory surgical centers and doctors’ offices, and certain of our competitors have better capabilities to serve certain sites of care than we do.
Removed
These ERP-related business interruptions caused several adverse consequences, including disruption to our ability to distribute product, difficulty in meeting customer demand, productivity declines and delays in invoicing customers, as well as causing the transition to the new ERP system to be more expensive and time-consuming than we anticipated.
Added
We are transforming aspects of our sales and distribution network and go-to-market model in the U.S. and certain other markets, and these efforts may not be successful and they involve risks and challenges that may adversely impact our business, results of operations and financial condition.
Removed
In addition, some customers affected by these disruptions may have secured supply from alternative sources, and we may not be able to regain their trust and business.
Added
We are converting substantial portions of our U.S. sales force from independent distributors and sales representatives to our employees in a multi-year initiative. We are also increasing product category specialization and focus across our U.S. sales force, which may lead to disruptions for our sales personnel.
Removed
Our information systems, and those of third parties with whom we contract, require an ongoing commitment of significant resources to maintain, protect and enhance existing systems and develop new systems to keep pace with continuing changes in information technology, evolving systems and regulatory standards, changing threats and vulnerabilities, and the increasing need to protect data including patient, customer and Confidential Information.
Added
We may not successfully execute or manage this transformation and transition, which could materially and adversely affect our business, results of operations and financial condition. These transformative actions present significant operational, legal, financial and cultural challenges and require effective planning and execution across recruiting, onboarding, training, systems integration, compensation, compliance and management.
Removed
Our cybersecurity program, incident response efforts, business continuity procedures and disaster recovery planning may not be sufficient for all eventualities.
Added
We could experience operational disruptions, increased costs and reduced sales, and we may lose key sales personnel, including high-performing distributors, sales leaders and sales representatives, to competitors if they decline employment with us or depart following the transition. Any such departures could lead to loss of customer relationships, sales coverage gaps, diminished sales effectiveness and lower net sales.
Removed
We will continue to dedicate significant resources to protect against unauthorized access to our systems and work with government authorities to detect and reduce the risk of future cyber incidents; however, cyber attacks are becoming more sophisticated, frequent and adaptive.
Added
Even if we are able to retain key personnel, we expect to experience disruption to our U.S. sales force as roles, territories, product category sales coverage, compensation structures, incentive plans, reporting lines, systems and processes change, which could reduce morale, productivity and continuity in customer engagement, which could adversely affect our business, results of operations and financial condition.
Removed
Any significant breakdown, intrusion, breach, interruption, corruption or destruction of these systems 17 could have a material adverse effect on our business and reputation and could materially adversely affect our results of operations and financial condition.
Added
Additionally, competitors are attempting, and may continue to attempt, to recruit our sales personnel (whether independent or employed) and target our customer relationships during and after the transition. The magnitude and duration of these impacts are uncertain and may be exacerbated by macroeconomic conditions, competition or other factors.
Removed
Tax law changes in certain foreign jurisdictions in which we operate conforming to Pillar Two of the base erosion and profit shifting plan (“Pillar Two”) undertaken by the Organisation for Economic Co-operation and Development began to take effect in 2024.
Added
We are additionally making certain changes to our sales force and go-to-market models in certain other countries in an effort to optimize our commercial strategies and improve our performance on a consistent basis in those markets.
Removed
We expect the implementation and interpretation of Pillar Two across jurisdictions where we do business to have adverse effects on our effective tax rate, results of operations, and cash flows. These tax law changes require profits earned in such jurisdictions to be subject to a minimum 15 percent income tax rate.
Added
We are separately tailoring the nature, timing and scale of the changes to the requirements of individual markets, and do not expect the changes to be uniform.
Removed
As discussed further in Note 11 to our consolidated financial statements, in the fourth quarter of 2022, we recorded goodwill impairment charges of $289.8 million as a result of, among other factors, changes in foreign currency exchange rates in our European-based currencies, inflation and a higher interest rate environment; and in the second quarter of 2022, we recorded $3.0 million of an in-process research and development (“IPR&D”) intangible asset impairment on a certain IPR&D project.
Added
Throughout the transition to this new model in certain emerging markets, we expect revenue performance to be inconsistent as we negotiate with the displaced distributors, execute initial stocking orders with the new platform distributors and allow the platform distributors to coordinate with their sub-distributor network.
Removed
Sanctions and other civil, political and economic effects of such conflicts are likely to have adverse impacts upon us.
Added
Each market’s transformation efforts present significant operational, legal, financial and cultural challenges and risks that are similar to those found in our above-described U.S. sales force transformation efforts, which risks may be magnified by the complexity of implementing different changes across multiple markets in parallel.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+0 added−1 removed12 unchanged
Biggest changeO ur VP, IT Global Infrastructure (“ITGI” ) leads our cybersecurity program through our global information security operations team and also leads our IT Governance, Risk and Compliance and Incident Response functions. Ou r acting Chief Information Security Officer (“CISO”) leads our security operations functions.
Biggest changeOur VP, Chief Information Security Officer (“CISO”) leads our cybersecurity program through our global information security operations team and also leads our IT Governance, Risk and Compliance and Incident Response functions. Our CISO has over 30 years of experience in IT security across several industry sectors and cybersecurity leadership.
We assess third party cybersecurity controls through a cybersecurity questionnaire and include security and privacy addenda to our contracts where applicable. We maintain separation of duties between our cybersecurity organization and other IT functional areas as well as established roles that define the responsibility of the cybersecurity team within our organization.
We assess third party cybersecurity controls through a cybersecurity questionnaire and include security and privacy addenda to our contracts where applicable. We maintain separation of duties between 26 our cybersecurity organization and other IT functional areas as well as established roles that define the responsibility of the cybersecurity team within our organization.
We engage third parties to enhance and strengthen our cybersecurity program, to provide additional capabilities and support and to provide annual independent assessments and evaluations of our cybersecurity program. Third parties 25 also provide managed services for incident response, proactive threat identification services, security architecture consulting, security remediation services, patching and external audit services.
We engage third parties to enhance and strengthen our cybersecurity program, to provide additional capabilities and support and to provide annual independent assessments and evaluations of our cybersecurity program. Third parties also provide managed services for incident response, proactive threat identification services, security architecture consulting, security remediation services, patching and external audit services.
Under the direction of our ITGI and CISO, we monitor developments that could affect our long-term organizational cybersecurity strategy based on threats globally and to continually enhance our cybersecurity program in response to such developments.
Under the direction of our CISO, we monitor developments that could affect our long-term organizational cybersecurity strategy based on threats globally and to continually enhance our cybersecurity program in response to such developments.
However, we are subject to ongoing risks from cybersecurity threats that could materially affect us, including our business strategy, results of operations, or financial condition, as further described in Item 1A.
How ever, we are subject to ongoing risks from cybersecurity threats that could materially affect us, including our business strategy, results of operations, or financial condition, as further described in Item 1A.
As part of our cybersecurity program, our CISO and/or our Chief Information and Technology Officer regularly report on cybersecurity matters to our Audit Committee. As of December 31, 2024, our Cybersecurity, Risk and Compliance teams consisted of team members and contractors, many of whom have advanced degrees and cybersecurity-related industry certifications.
As part of our cybersecurity program, our CISO and/or our Chief Information and Technology Officer regularly report on cybersecurity matters to our Audit Committee. As of December 31, 2025, our security operations and Governance, Risk and Compliance teams consisted of team members and contractors, many of whom have advanced degrees and cybersecurity-related industry certifications.
Removed
Our CISO has over 10 years of experience in information technology security obtained in civilian and military roles and our ITGI has over 20 years of experience in information technology and cybersecurity leadership obtained in civilian roles.

Item 2. Properties

Properties — owned and leased real estate

5 edited+1 added−2 removed0 unchanged
Biggest changeWe maintain large, centralized warehouses in the U.S. and the Netherlands to be able to efficiently distribute our products to customers in the U.S. and EMEA. We believe that all of the facilities and equipment are in good condition, well maintained and able to operate at present levels.
Biggest changeWe distribute our products both through large, centralized warehouses and through smaller, market specific facilities, depending on the needs of the market. We maintain large, centralized warehouses in the U.S. and the Netherlands to be able to efficiently distribute our products to customers in the U.S. and EMEA.
Item 2. Pr operties We own or lease approximately 300 different facilities around the world, of which approximately half are in the U.S. Our corporate headquarters is in Warsaw, Indiana. Warsaw, Indiana is also home to our most significant manufacturing, research and development (“R&D”) and other business activities for our Knees, Hips and S.E.T. product divisions.
Item 2. Pr operties We own or lease approximately 300 different facilities around the world, of which approximately half are in the U.S. Our corporate headquarters is in Warsaw, Indiana. Warsaw, Indiana is also home to our most significant manufacturing, research and development (“R&D”) and other business activities for our Knees, Hips and S.E.T. 27 product divisions.
Internationally, our EMEA regional headquarters is in Switzerland and our Asia Pacific regional headquarters is in Singapore. We have approximately 25 manufacturing locations in the U.S. and internationally. Our most significant locations outside of the U.S. are in Switzerland, Ireland, China, and Puerto Rico.
Internationally, our EMEA regional headquarters is in Switzerland and our Asia Pacific regional headquarters is in Singapore. We have approximately 25 manufacturing locations in the U.S. and internationally. Our most significant locations outside of the U.S. are in Switzerland, Ireland and China. We primarily own our manufacturing facilities in the U.S.; internationally, we occupy both owned and leased manufacturing facilities.
We believe the current facilities, including manufacturing, warehousing, R&D and office space, provide sufficient capacity to meet ongoing demands. Item 3. Legal Proceedings Information pertaining to certain legal proceedings in which we are involved can be found in Note 21 to our consolidated financial statements included in Part II, Item 8 of this report and is incorporated herein by reference.
Legal Proceedings Information pertaining to certain legal proceedings in which we are involved can be found in Note 20 to our consolidated financial statements included in Part II, Item 8 of this report and is incorporated herein by reference. Item 4. Mine Saf ety Disclosures Not Applicable. 28 PART II
These local market facilities are primarily leased due to common businesses practices and to allow us to be more adaptable to changing needs in the market. 26 We distribute our products both through large, centralized warehouses and through smaller, market specific facilities, depending on the needs of the market.
We maintain sales and administrative offices and warehouse and distribution facilities in more than 45 countries around the world. These local market facilities are primarily leased due to common businesses practices and to allow us to be more adaptable to changing needs in the market.
Removed
We primarily own our manufacturing facilities in the U.S.; internationally, we occupy both owned and leased manufacturing facilities. We maintain sales and administrative offices and warehouse and distribution facilities in more than 45 countries around the world.
Added
We believe that all of the facilities and equipment are in good condition, well maintained and able to operate at present levels. We believe the current facilities, including manufacturing, warehousing, R&D and office space, provide sufficient capacity to meet ongoing demands. Item 3.
Removed
Item 4. Mine Saf ety Disclosures Not Applicable. 27 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−0 removed3 unchanged
Biggest changeDecember 31, Company/Index 2019 2020 2021 2022 2023 2024 Zimmer Biomet Holdings, Inc. $ 100.00 $ 103.76 $ 86.09 $ 89.80 $ 86.38 $ 75.61 S&P 500 Stock Index 100.00 118.40 152.39 124.79 157.59 197.02 S&P 500 Health Care Equipment Index 100.00 117.63 140.40 113.92 124.22 137.81 Issuer Purchases of Equity Securities The following table summarizes repurchases of common stock settled during the three months ended December 31, 2024: 28 Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as a Part of Publicly Announced Program (1) Maximum Approximate Dollar Value of Shares that may yet be Purchased Under the Program (1) October 2024 554,874 $ 104.62 554,874 $ 1,249,999,420 November 2024 - - - 1,249,999,420 December 2024 - - - 1,249,999,420 Total 554,874 $ 104.62 554,874 $ 1,249,999,420 (1) In May 2024, our Board of Directors authorized a $2.0 billion share repurchase program effective May 29, 2024, with no expiration date.
Biggest changeDecember 31, Company/Index 2020 2021 2022 2023 2024 2025 Zimmer Biomet Holdings, Inc. $ 100.00 $ 82.98 $ 86.55 $ 83.25 $ 72.88 $ 62.65 S&P 500 Stock Index 100.00 128.71 105.40 133.10 166.40 196.16 S&P 500 Health Care Equipment Index 100.00 119.35 96.84 105.60 117.15 126.87 29 Issuer Purchases of Equity Securities The following table summarizes repurchases of common stock settled during the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as a Part of Publicly Announced Program (1) Maximum Approximate Dollar Value of Shares that may yet be Purchased Under the Program (1) October 1–31, 2025 - $ - - $ 1,020,224,454 November 1–30, 2025 1,400,000 91.50 1,400,000 892,125,184 December 1–31, 2025 1,311,242 92.97 1,311,242 770,224,506 Total 2,711,242 $ 92.21 2,711,242 $ 770,224,506 (1) In May 2024, our Board of Directors authorized a $2.0 billion share repurchase program effective May 29, 2024, with no expiration date.
The graph below shows the cumulative total stockholder return on our common stock compared to the S&P 500 Stock Index and the S&P 500 Health Care Equipment Index. The chart assumes $100 was invested on December 31, 2019 in Zimmer Biomet common stock and each index and that dividends were reinvested.
The graph below shows the cumulative total stockholder return on our common stock compared to the S&P 500 Stock Index and the S&P 500 Health Care Equipment Index. The chart assumes $100 was invested on December 31, 2020 in Zimmer Biomet common stock and each index and that dividends were reinvested.
Market for the Registrant’s Common Equity, Related S tockholder Matters and Issuer Purchases of Equity Securities Market for the Registrant’s Common Equity and Related Stockholder Matters Our common stock is traded on the New York Stock Exchange and the SIX Swiss Exchange under the symbol “ZBH.” As of February 10, 2025, there were approximately 12,544 holders of record of our common stock.
Market for the Registrant’s Common Equity, Related S tockholder Matters and Issuer Purchases of Equity Securities Market for the Registrant’s Common Equity and Related Stockholder Matters Our common stock is traded on the New York Stock Exchange and the SIX Swiss Exchange under the symbol “ZBH.” As of February 10, 2026, there were approximately 11,627 holders of record of our common stock.
Added
On February 9, 2026, our Board of Directors terminated this program and authorized a $1.5 billion share repurchase program effective February 9, 2026, with no expiration date. Item 6. [Reserved] 30

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

75 edited+33 added−25 removed15 unchanged
Biggest changeThese unfavorable items were partially offset by the net sales increase, savings from our 2023 Restructuring Plan and other initiatives, and lower research and development ("R&D") spending for initial compliance with the European Union Medical Device Regulation ("EU MDR"). 2025 Outlook (excludes any impacts from the proposed Paragon 28, Inc. acquisition) We expect year-over-year revenue growth of 1.0 percent to 3.5 percent in 2025 to be driven by a combination of market growth, new product introductions and commercial execution.
Biggest changeThese unfavorable items were partially offset by the net sales increase, a favorable mix shift to higher margin products and markets, favorable adjustments related to contingent consideration for acquisitions, gains recognized on our equity investments in 2025 compared to losses in 2024, lower restructuring costs due to the timing of our restructuring programs, and lower litigation-related charges. 2026 Outlook We expect year-over-year net sales growth of 2.5 percent to 4.5 percent in 2026 to be driven by a combination of market growth, new product introductions, the Paragon 28 acquisition and positive effects of changes in foreign currency exchange rates, partially offset by the expected impact from changes to our go-to-market strategy and execution in the U.S. and certain other international markets, as well as price declines.
We review sales by these geographies because the underlying market trends in any particular geography tend to be similar across product categories, because we primarily sell the same products in all geographies and because many of our competitors publicly report in this manner.
We review sales by these geographies because the underlying market trends in any particular 31 geography tend to be similar across product categories, because we primarily sell the same products in all geographies and because many of our competitors publicly report in this manner.
Fair value under the income approach was determined by discounting to present value the estimated future cash flows of the reporting unit. Fair value under the market approach utilized the guideline public company methodology, which uses valuation indicators determined from other businesses that are similar to our reporting unit.
Fair value under the income approach was determined by discounting to present value the 38 estimated future cash flows of the reporting unit. Fair value under the market approach utilized the guideline public company methodology, which uses valuation indicators determined from other businesses that are similar to our reporting unit.
Since there is uncertainty on the timing or whether such payments will have to be made, they have not been recognized on our consolidated balance sheets. These estimated payments related to these agreements could range from $0 to $325 million.
Since there is uncertainty on the timing or whether such payments will have to be made, they have not been recognized on our consolidated balance sheets. These estimated payments related to these agreements could range from $0 to $225 million.
Currently, we cannot reasonably estimate the impact of all these items on our financial results. See Note 17 to our consolidated financial statements for additional information on our income taxes.
Currently, we cannot reasonably estimate the impact of all these items on our financial results. See Note 16 to our consolidated financial statements for additional information on our income taxes.
In March, May, August and December 2024, our Board of Directors declared cash dividends of $0.24 per share. We expect to continue paying cash dividends on a quarterly basis; however, future dividends are subject to approval of the Board of Directors and may be adjusted as business needs or market conditions change.
In February, May, August and December 2025, our Board of Directors declared cash dividends of $0.24 per share. We expect to continue paying cash dividends on a quarterly basis; however, future dividends are subject to approval of the Board of Directors and may be adjusted as business needs or market conditions change.
We performed a qualitative test on the other reporting unit and concluded it was more likely than not the fair value of this reporting unit exceeded its carrying value. Future impairment in our reporting units could occur if the estimates used in the income and market approaches change.
We performed a qualitative test on the other two reporting units and concluded it was more likely than not the fair value of each of these reporting units exceeded its carrying value. Future impairment in our reporting units could occur if the estimates used in the income and market approaches change.
We have four reporting units with goodwill assigned to them. During our annual goodwill impairment testing in the fourth quarter of 2024, for the three reporting units we quantitatively tested their estimated fair values exceeded their carrying values by more than 30 percent. We estimated the fair value of these reporting units using the income and market approaches.
We have four reporting units with goodwill assigned to them. During our annual goodwill impairment testing in the fourth quarter of 2025, for the two reporting units we quantitatively tested, their estimated fair values exceeded their carrying values by more than 25 percent. We estimated the fair value of these reporting units using the income and market approaches.
Expenses as a Percent of Net Sales Year Ended December 31, 2024 2023 2022 2024 vs. 2023 Inc/(Dec) 2023 vs. 2022 Inc/(Dec) Cost of products sold, excluding intangible asset amortization 28.5 % 28.2 % 29.1 % 0.3 % (0.9) % Intangible asset amortization 7.7 7.6 7.6 0.1 - Research and development 5.7 6.2 5.9 (0.5) 0.3 Selling, general and administrative 38.2 38.4 39.8 (0.2) (1.4) Goodwill and intangible asset impairment - - 4.2 - (4.2) Restructuring and other cost reduction initiatives 2.9 2.1 2.8 0.8 (0.7) Quality remediation - - 0.5 - (0.5) Acquisition, integration, divestiture and related 0.3 0.3 0.2 - 0.1 Operating Profit 16.7 17.3 10.0 (0.6) 7.3 Cost of Products Sold and Intangible Asset Amortization 32 Cost of products sold, excluding intangible asset amortization, increased in both amount and as a percentage of net sales in 2024 compared to 2023.
Expenses as a Percent of Net Sales Year Ended December 31, 2025 2024 2023 2025 vs. 2024 Inc/(Dec) 2024 vs. 2023 Inc/(Dec) Cost of products sold, excluding intangible asset amortization 30.3 % 28.5 % 28.2 % 1.8 % 0.3 % Intangible asset amortization 8.1 7.7 7.6 0.4 0.1 Research and development 5.6 5.7 6.2 (0.1) (0.5) Selling, general and administrative 39.6 38.2 38.4 1.4 (0.2) Restructuring and other cost reduction initiatives 2.2 2.9 2.1 (0.7) 0.8 Acquisition, integration, divestiture and related 0.9 0.3 0.3 0.6 - Operating Profit 13.3 16.7 17.3 (3.4) (0.6) Cost of Products Sold and Intangible Asset Amortization Cost of products sold, excluding intangible asset amortization, increased in both amount and as a percentage of net sales in 2025 compared to 2024.
Further, there can be no assurance that, if needed, we will be able to secure additional financing on terms favorable to us, if at all. Sources of Liquidity Cash flows provided by operating activities from continuing operations were $1,499.4 million in 2024 compared to $1,581.6 million in 2023.
Further, there can be no assurance that, if needed, we will be able to secure additional financing on terms favorable to us, if at all. Sources of Liquidity Cash flows provided by operating activities were $1,697.1 million in 2025 compared to $1,499.4 million in 2024.
In addition, we had $1.0 billion available to borrow under a 364-day revolving credit agreement that matures on June 27, 2025, and $1.5 billion available under a five-year revolving facility that matures on June 28, 2029. The terms of the 364-day revolving credit agreement and the five-year revolving facility are described further in Note 13 to our consolidated financial statements.
In addition, we had $1.0 billion available to borrow under a 364-day revolving credit agreement that matures on June 26, 2026, and $1.5 billion available under a five-year revolving facility that matures on June 27, 2030. The terms of the 364-day revolving credit agreement and the five-year revolving facility are described further in Note 12 to our consolidated financial statements.
The following table sets forth the factors that contributed to the gross margin changes in each of 2024 and 2023 compared to the prior year: Year Ended December 31, 2024 2023 Prior year gross margin 64.2 % 63.3 % Impact from selling prices 0.2 (0.2 ) Manufacturing costs (1.2 ) (0.1 ) Volume, product and market mix and other 0.7 1.4 Inventory charges 0.1 (0.5 ) Changes in foreign currency exchange rates (0.1 ) 0.3 Intangible asset amortization (0.1 ) - Current year gross margin 63.8 % 64.2 % Operating Expenses Research & development (“R&D”) expenses decreased in both amount and as a percentage of net sales in 2024 compared to 2023.
The following table sets forth the factors that contributed to the gross margin changes in each of 2025 and 2024 compared to the prior year: Year Ended December 31, 2025 2024 Prior year gross margin 63.8 % 64.2 % Impact from selling prices - 0.2 Manufacturing costs 0.1 (1.2 ) Volume, product and market mix and other 1.0 0.7 Inventory charges (1.9 ) 0.1 Changes in foreign currency exchange rates (0.2 ) (0.1 ) Inventory step-up (0.4 ) - U.S. tariffs (0.4 ) - Intangible asset amortization (0.4 ) (0.1 ) Current year gross margin 61.6 % 63.8 % Operating Expenses Research & development (“R&D”) expenses increased in amount, but decreased as a percentage of net sales in 2025 compared to 2024.
Our effective tax rate (“ETR”) on earnings from continuing operations before income taxes was 12.7 percent and 4.0 percent for the years ended December 31, 2024 and 2023, respectively.
Our effective tax rate (“ETR”) on earnings from continuing operations before income taxes was 15.1 percent and 12.7 percent for the years ended December 31, 2025 and 2024, respectively.
In 2024, the ETR was primarily driven by the foreign rate differential as our foreign locations have lower corporate income tax rates and net favorable impact of changes to unrecognized tax benefits. In 2023, the ETR was primarily driven by net favorable impact of changes to unrecognized tax benefits.
In 2025, the ETR was primarily driven by the foreign rate differential as our foreign locations have lower corporate income tax rates and a net favorable impact of certain intercompany transactions and restructuring. In 2024, the ETR was primarily driven by the foreign rate differential and a net favorable impact of changes to unrecognized tax benefits.
Asia Pacific In Asia Pacific, operating profit and operating profit as a percentage of net sales increased in 2024 when compared to 2023.
Asia Pacific In Asia Pacific, operating profit and operating profit as a percentage of net sales decreased in 2025 when compared to 2024.
We expect to reduce gross annual pre-tax operating expenses by $175 million to $200 million relative to the 2023 baseline expenses by the end of 2025 as program benefits under the 2023 Restructuring Plan are realized. The 2021 Restructuring Plan was completed by the end of 2024, resulting in $169 million of total pre-tax charges.
We expect to reduce gross annual pre-tax operating expenses by approximately $175 million relative to the 2024 baseline expenses by the end of 2027 as program benefits under the 2025 Restructuring Plan are realized. The 2023 Restructuring Plan, which was completed in 2025, resulted in total pre-tax charges of $115 million.
We recognized expenses of $219.0 million and $151.9 million in 2024 and 2023, respectively, primarily related to employee termination benefits, sales agent contract terminations, and consulting and project management expenses associated with these programs.
We recognized expenses of $181.2 million and $219.0 million in 2025 and 2024, respectively, primarily related to employee termination benefits, sales agent contract terminations, and consulting and project management expenses associated with these programs and optimization initiatives.
Net Sales by Geography The following table presents net sales by geography and the percentage changes (dollars in millions): Year Ended December 31, 2024 2023 2022 2024 vs. 2023 % Inc 2023 vs. 2022 % Inc United States $ 4,439.0 $ 4,288.8 $ 4,012.4 3.5 % 6.9 % International 3,239.6 3,105.4 2,927.5 4.3 6.1 Total $ 7,678.6 $ 7,394.2 $ 6,939.9 3.8 6.5 Net Sales by Product Category The following table presents net sales by product category and the percentage changes (dollars in millions): Year Ended December 31, 2024 2023 2022 2024 vs. 2023 % Inc 2023 vs. 2022 % Inc Knees $ 3,173.5 $ 3,038.4 $ 2,778.3 4.4 % 9.4 % Hips 1,999.1 1,967.2 1,894.9 1.6 3.8 S.E.T. 1,865.7 1,752.6 1,696.7 6.5 3.3 Technology & Data, Bone Cement and Surgical 640.3 636.0 570.0 0.7 11.6 Total $ 7,678.6 $ 7,394.2 $ 6,939.9 3.8 6.5 The following table presents net sales by product category by geography for our Knees and Hips product categories (dollars in millions): Year Ended December 31, 2024 2023 2022 2024 vs. 2023 % Inc 2023 vs. 2022 % Inc Knees United States $ 1,814.7 $ 1,770.6 $ 1,615.0 2.5 % 9.6 % International 1,358.8 1,267.8 1,163.3 7.2 9.0 Total $ 3,173.5 $ 3,038.4 $ 2,778.3 4.4 9.4 Hips United States $ 1,040.0 $ 1,012.3 $ 960.9 2.7 % 5.4 % International 959.1 954.9 934.0 0.4 2.2 Total $ 1,999.1 $ 1,967.2 $ 1,894.9 1.6 3.8 Demand (Volume/Mix) Trends Changes in volume and mix of product sales had a positive effect of 4.2 percent on year-over-year sales growth in 2024.
Net Sales by Geography The following table presents net sales by geography and the percentage changes (dollars in millions): Year Ended December 31, 2025 2024 2023 2025 vs. 2024 % Inc 2024 vs. 2023 % Inc United States $ 4,764.0 $ 4,439.0 $ 4,288.8 7.3 % 3.5 % International 3,467.5 3,239.6 3,105.4 7.0 4.3 Total $ 8,231.5 $ 7,678.6 $ 7,394.2 7.2 3.8 Net Sales by Product Category The following table presents net sales by product category and the percentage changes (dollars in millions): Year Ended December 31, 2025 2024 2023 2025 vs. 2024 % Inc 2024 vs. 2023 % Inc Knees $ 3,322.3 $ 3,173.5 $ 3,038.4 4.7 % 4.4 % Hips 2,093.5 1,999.1 1,967.2 4.7 1.6 S.E.T. 2,150.2 1,865.7 1,752.6 15.2 6.5 Technology & Data, Bone Cement and Surgical 665.6 640.3 636.0 4.0 0.7 Total $ 8,231.5 $ 7,678.6 $ 7,394.2 7.2 3.8 The following table presents net sales by product category by geography for our Knees and Hips product categories (dollars in millions): Year Ended December 31, 2025 2024 2023 2025 vs. 2024 % Inc 2024 vs. 2023 % Inc Knees United States $ 1,867.5 $ 1,814.7 $ 1,770.6 2.9 % 2.5 % International 1,454.8 1,358.8 1,267.8 7.1 7.2 Total $ 3,322.3 $ 3,173.5 $ 3,038.4 4.7 4.4 Hips United States $ 1,094.6 $ 1,040.0 $ 1,012.3 5.3 % 2.7 % International 998.8 959.1 954.9 4.1 0.4 Total $ 2,093.5 $ 1,999.1 $ 1,967.2 4.7 1.6 Demand (Volume/Mix) Trends Changes in volume and mix of product sales had a positive effect of 6.4 percent on year-over-year sales growth in 2025.
Cash flows used in investing activities from continuing operations were $888.1 million in 2024 compared to $778.9 million in 2023. Instrument and property, plant and equipment additions reflected ongoing investments in our product portfolio, including new product introductions, optimization of our manufacturing and logistics networks, and investments in ERP software.
Cash flows used in investing activities were $1,975.7 million in 2025 compared to $888.1 million in 2024. Instrument and property, plant and equipment additions reflected ongoing investments in our product portfolio, including new product introductions and optimization of our manufacturing and logistics networks.
The 2023 Restructuring Plan along is expected to result in total pre-tax charges of approximately $120 million by the end of 2025, of which $114 million was incurred through December 31, 2024.
The 2025 Restructuring Plan is expected to result in total pre-tax charges of approximately $155 million by the end of 2027, of which approximately $137 million was incurred through December 31, 2025.
We estimate gross annual pre-tax operating expenses were reduced by approximately $190 million relative to the 2021 baseline expenses by the end of 2024. The 2019 Restructuring Plan is expected to result in total pre-tax restructuring charges of approximately $400 million by the end of 2025, of which $368 million was incurred through December 31, 2024.
We estimate gross annual pre-tax operating expenses were reduced by approximately $190 million relative to the 2021 baseline expenses by the end of 2024. The 2019 Restructuring Plan, which was substantially completed as of December 31, 2025, resulted in total pre-tax restructuring charges of $393 million.
The year-over-year change was primarily due to higher losses on debt and equity security investments in 2024 when compared to 2023.
The year-over-year change was primarily due to gains recognized on equity investments in 2025 as compared to losses on debt and equity security investments in 2024.
Material Cash Requirements from Known Contractual and Other Obligations At December 31, 2024, we had outstanding debt of $6,204.6 million, of which $863.0 million was classified as current debt that matures on April 1, 2025.
Material Cash Requirements from Known Contractual and Other Obligations At December 31, 2025, we had outstanding debt of $7,519.1 million, of which $587.1 million was classified as current debt that matures on December 13, 2026.
Discussion, analysis and comparisons of the years ended December 31, 2023 and 2022 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 Exhibit 99.1 to our Current Report on Form 8-K filed on August 7, 2024.
Discussion, analysis and comparisons of the years ended December 31, 2024 and 2023 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 our Annual Report on Form 10-K filed on February 25, 2025.
Under the Tax Cuts and Jobs Act of 2017, we have a $154.6 million liability remaining from a one-time tax on the mandatory deemed repatriation of post-1986 untaxed foreign earnings and profits (“transition tax”) for the deemed repatriation of unremitted foreign earnings.
Under the Tax Cuts and Jobs Act of 2017, we have a $85.9 million current liability remaining from a one-time tax on the mandatory deemed repatriation of post-1986 untaxed foreign earnings and profits (“transition tax”) for the deemed repatriation of unremitted foreign earnings. Our 2026 payment will be our last from this transition tax.
(Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic); and Technology & Data, Bone Cement and Surgical. This sales analysis differs from our reportable operating segments, which are based upon our senior management organizational structure and how we allocate resources toward achieving operating profit goals.
This sales analysis differs from our reportable operating segments, which are based upon our senior management organizational structure and how we allocate resources toward achieving operating profit goals.
We estimate operating profit will increase in 2025 when compared to 2024 due to higher net sales, leverage from fixed operating expenses, ongoing savings from our restructuring plans and lower employee termination and other charges from our restructuring plans.
We estimate operating profit will increase in 2026 when compared to 2025 due to higher net sales, leverage from fixed operating expenses, ongoing savings from our restructuring plans, non-recurrence of inventory and instrument charges related to certain product lines we expect to discontinue and lower employee termination and other charges from our restructuring plans.
These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. 37 Commitments and Contingencies - We are involved in various ongoing proceedings, legal actions and claims, including product liability, intellectual property, stockholder matters, tax disputes, commercial disputes, employment matters, whistleblower and qui tam claims and investigations, governmental proceedings and investigations, and other legal matters that arise in the normal course of our business.
Commitments and Contingencies - We are involved in various ongoing proceedings, legal actions and claims, including product liability, intellectual property, stockholder matters, tax disputes, commercial disputes, employment matters, whistleblower and qui tam claims and investigations, governmental proceedings and investigations, and other legal matters that arise in the normal course of our business.
Although the ultimate timing for resolution of the disputed tax issues is uncertain, future payments may be significant to our operating cash flows.
We have disputed these proposed adjustments and intend to continue to vigorously defend our positions. Although the ultimate timing for resolution of the disputed tax issues is uncertain, future payments may be significant to our operating cash flows.
Amounts reported in millions within this Annual Report on Form 10-K are computed based on the actual amounts. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. In addition, certain columns and rows within tables may not sum to the totals due to the use of rounded numbers.
As a result, the sum of the components may not equal the total amount reported in millions due to rounding. In addition, certain columns and rows within tables may not sum to the totals due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded amounts.
In 2024, we executed share repurchases under this new repurchase program as well as a previous program in an aggregate amount of $868.0 million to return cash to investors as well as to limit ownership dilution from the issuance of common stock under our share-based compensation programs and in connection with our acquisition of Embody, Inc.
In 2025, we executed share repurchases under this repurchase program in an aggregate amount of $487.0 million to return cash to investors as well as to limit ownership dilution from the issuance of common stock under our share-based compensation programs. As of December 31, 2025, $770.2 million remained authorized under this program.
Percentages presented are calculated from the underlying unrounded amounts. The following discussion, analysis and comparisons generally focus on the operating results for the years ended December 31, 2024 and 2023.
The following discussion, analysis and comparisons generally focus on the operating results for the years ended December 31, 2025 and 2024.
Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities.
Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.
Product Categories In 2024, our Knees and Hips net sales increased by 4.4 percent and 1.6 percent, respectively, when compared to 2023 due to market growth and new product introductions. Changes in foreign currency exchange rates had negative effects of 0.8 percent and 1.4 percent on 2024 Knees and Hips net sales, respectively.
The Paragon 28 acquisition contributed 1.1 percent and changes in foreign currency exchange rates contributed 1.8 percent to International net sales growth in 2025. Product Categories In 2025, our Knees and Hips net sales both increased by 4.7 percent when compared to 2024 due to market growth and new product introductions.
Based on foreign currency exchange rates at the end of 2024, we expect foreign currency to negatively affect year-over-year net sales by approximately 1.5 percent to 2.0 percent.
Based on foreign currency exchange rates at the end of 2025, we expect foreign currency to have a 0.5 percent positive impact on year-over-year net sales growth.
We expect to pay these liabilities over the next few years. In the normal course of business, we enter into purchase commitments, primarily related to raw materials. However, we do not believe these purchase commitments are material to the overall standing of our business or our liquidity.
In the normal course of business, we enter into purchase commitments, primarily related to raw materials. However, we do not believe these purchase commitments are material to the overall standing of our business or our liquidity. For each of our acquisitions that include contingent consideration, there is a maximum payout.
Segment Operating Profit Segment Profit as a Net Sales Segment Profit Percentage of Net Sales Year Ended December 31, Year Ended December 31, Year Ended December 31, (dollars in millions) 2024 2023 2022 2024 2023 2022 2024 2023 2022 Americas $ 4,794.8 $ 4,624.1 $ 4,295.5 $ 2,577.0 $ 2,487.1 $ 2,282.4 53.7 % 53.8 % 53.1 % EMEA 1,691.1 1,592.4 1,456.5 585.8 538.2 416.1 34.6 33.8 28.6 Asia Pacific 1,192.8 1,177.7 1,187.8 457.6 432.3 429.1 38.4 36.7 36.1 Americas In the Americas, operating profit increased, but operating profit as a percentage of net sales slightly decreased, in 2024 compared to 2023.
Segment Operating Profit Segment Profit as a Net Sales Segment Profit Percentage of Net Sales Year Ended December 31, Year Ended December 31, Year Ended December 31, (dollars in millions) 2025 2024 2023 2025 2024 2023 2025 2024 2023 Americas $ 5,144.6 $ 4,794.8 $ 4,624.1 $ 2,645.7 $ 2,576.3 $ 2,487.7 51.4 % 53.7 % 53.8 % EMEA 1,828.8 1,691.1 1,592.4 595.0 594.3 545.0 32.5 35.1 34.2 Asia Pacific 1,258.1 1,192.8 1,177.7 446.0 462.1 437.0 35.5 38.7 37.1 Americas In the Americas, operating profit increased, but operating profit as a percentage of net sales decreased, in 2025 compared to 2024.
Our ETR in future periods could also potentially be impacted by: changes in our mix of pre-tax earnings; changes in tax rates, tax laws or their interpretation, including the continued adoption of Pillar Two proposals which began to take effect in 2024; the outcome of various federal, state and foreign audits, appeals, and litigation; and the expiration of certain statutes of limitations.
Our ETR in future periods could also potentially be impacted by: changes in our mix of pre-tax earnings; changes in tax rates, tax laws or their interpretation, including the OECD framework to implement a global minimum corporate tax of 15% for companies with global revenue and profits above certain thresholds (referred to as Pillar 2); the outcome of various federal, state and foreign audits, appeals, and litigation; and the expiration of certain statutes of limitations.
We estimate the total liabilities for all litigation matters was $156.4 million as of December 31, 2024. However, 36 litigation is inherently uncertain, and upon resolution of any of these uncertainties, we may incur charges in excess of these estimates, and may in the future incur other material judgments or enter into other material settlements of claims.
However, litigation is inherently uncertain, and upon resolution of any of these uncertainties, we may incur charges in excess of these estimates, and may in the future incur other material judgments or enter into other material settlements of claims. We expect to pay these liabilities over the next few years.
In December of each of 2023, 2021 and 2019, we initiated global restructuring programs (the “2023 Restructuring Plan,” the “2021 Restructuring Plan” and the “2019 Restructuring Plan,” respectively). We also have other cost reduction and optimization initiatives that have the goal of reducing costs across the organization.
In February 2025 and then as further expanded in December 2025, and in December of each of 2023, 2021 and 2019, we initiated global restructuring programs intended to reduce costs and transform the way we operate. We also have other cost reduction and optimization initiatives that have the goal of reducing costs across the organization.
Accordingly, inventory and instruments are written down to their net realizable value. To determine the appropriate net realizable value, we evaluate current stock levels in relation to historical and expected patterns of demand for all of our products and instrument systems and components.
To determine the appropriate net realizable value, we evaluate current stock levels in relation to historical and expected patterns of demand for all of our products and instrument systems and components. The basis for the determination is generally the same for all inventory and instrument items and categories except for work in process inventory, which is recorded at cost.
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in numerous jurisdictions across our global operations. We are subject to regulatory review or audit in virtually all of those jurisdictions and those reviews and audits may require extended periods of time to resolve.
We are subject to regulatory review or audit in virtually all of those jurisdictions and those reviews and audits may require extended periods of time to resolve.
Internationally, net sales increased by 4.3 percent in 2024 when compared to 2023. The 2024 International net sales increase was similarly driven by market growth in most of our international markets, but volume increases were partially offset by the negative impacts of changes in foreign currency exchange rates of 2.3 percent.
The Paragon 28 acquisition contributed 3.6 percent to U.S. net sales growth in 2025. Internationally, net sales increased by 7.0 percent in 2025 when compared to 2024. The 2025 International net sales increase was similarly driven by the Paragon 28 acquisition, market growth in most of our international markets and changes in foreign currency exchange rates.
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense. We estimate income tax expense and income tax liabilities and assets by taxable jurisdiction.
Income Taxes - Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid. We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.
As of December 31, 2024, $1,250.0 million remained authorized under this program. As discussed in Note 5 to our consolidated financial statements, we are executing on a 2023 Restructuring Plan, a 2021 Restructuring Plan and a 2019 Restructuring Plan.
As discussed in Note 4 to our consolidated financial statements, we are executing on a 2025 Restructuring Plan, 2023 Restructuring Plan, 2021 Restructuring Plan and a 2019 Restructuring Plan.
We believe that the accounting estimates and assumptions described below involve significant subjectivity and judgment, and changes to such estimates or assumptions could have a material impact on our financial condition or operating results.
We believe that the accounting estimates and assumptions described below involve significant subjectivity and judgment, and changes to such estimates or assumptions could have a material impact on our financial condition or operating results. 37 Excess Inventory and Instruments - We must determine as of each balance sheet date how much, if any, of our inventory may ultimately prove to be unsaleable or unsaleable at our carrying cost.
We believe we can satisfy these debt obligations with cash generated from our operations, by issuing new debt and/or by borrowing on our committed revolving credit facilities.
We believe we can satisfy these debt obligations with cash on hand, cash generated from our operations, by issuing new debt and/or by borrowing on our committed revolving credit facilities. For additional information on our debt, including types of debt, maturity dates, interest rates, debt covenants and available revolving credit facilities, see Note 12 to our consolidated financial statements.
Changes in foreign currency exchange rates had a negative effect of 0.6 percent on 2024 S.E.T. net sales.
Foreign Currency Exchange Rates In 2025, changes in foreign currency exchange rates had a positive effect of 0.8 percent on year-over-year sales.
Excess Inventory and Instruments - We must determine as of each balance sheet date how much, if any, of our inventory may ultimately prove to be unsaleable or unsaleable at our carrying cost. Similarly, we must also determine if instruments on hand will be put to productive use or remain undeployed as a result of excess supply.
Similarly, we must also determine if instruments on hand will be put to productive use or remain undeployed as a result of excess supply. Accordingly, inventory and instruments are written down to their net realizable value.
Further, changes in foreign currency exchange rates could increase the cost of procuring inventory and services from foreign suppliers, which could reduce reporting unit profitability. RECENT ACCOUNTING PRONOUNCEMENTS See Note 2 to our consolidated financial statements for information on how recent accounting pronouncements have affected or may affect our financial position, results of operations or cash flows.
RECENT ACCOUNTING PRONOUNCEMENTS See Note 2 to our consolidated financial statements for information on how recent accounting pronouncements have affected or may affect our financial position, results of operations or cash flows. 39
We place our cash and cash equivalents in highly-rated financial institutions and limit the amount of credit exposure to any one entity. We invest only in high-quality financial instruments in accordance with our internal investment policy. As of December 31, 2024, $436.8 million of our cash and cash equivalents were held in jurisdictions outside of the U.S.
We invest only in high-quality financial instruments in accordance with our internal investment policy. As of December 31, 2025, $353.8 million of our cash and cash equivalents were held in jurisdictions outside of the U.S. Of this amount, $77.6 million is denominated in U.S. Dollars and, therefore, bears no foreign currency translation risk.
Realization of deferred tax assets in each taxable jurisdiction is dependent on our ability to generate future taxable income sufficient to realize the benefits. We evaluate deferred tax assets on an ongoing basis and provide valuation allowances unless we determine it is “more likely than not” that the deferred tax benefit will be realized.
We evaluate deferred tax assets on an ongoing basis and provide valuation allowances unless we determine it is “more likely than not” that the deferred tax benefit will be realized. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in numerous jurisdictions across our global operations.
Of this amount, $59.3 million is denominated in U.S. Dollars and, therefore, bears no foreign currency translation risk. The remaining amount is denominated in currencies of the various countries where we operate. As discussed in Note 17 to our consolidated financial statements, we generally intend to limit distributions such that they would not result in significant U.S. tax costs.
The remaining amount is denominated in currencies of the various countries where we operate. As discussed in Note 16 to our consolidated financial statements, we generally intend to limit distributions from foreign subsidiaries earnings that were previously taxed in the U.S. These previously taxed earnings would not be subject to further U.S. federal tax.
Geography The 3.5 percent net sales growth in the U.S. in 2024 when compared to 2023 was driven by market growth in our Knees, Hips and S.E.T. product categories. However, net sales in the U.S. were negatively impacted by the implementation of our new ERP system which caused operational challenges in fulfilling customer orders.
Geography The 7.3 percent net sales growth in the U.S. in 2025 when compared to 2024 was driven by the Paragon 28 acquisition, market growth in our Knees, Hips and S.E.T. product categories, new product introductions, lower net sales in the prior year periods due to operational challenges fulfilling customer orders as a consequence of a new ERP software system implementation and opportunistic end-of-year customer purchases and capital sales above historic levels, partially offset by price reductions.
For the full year 2024, we estimate this ERP implementation had less than a one percent impact to our net sales. In addition, our net sales in 2024 were tempered by a negative 1.0 percent effect from changes in foreign currency exchange rates. Our net earnings were $903.8 million in 2024 compared to $1,024.0 million in 2023.
In addition, our net sales experienced a positive effect of 0.8 percent from changes in foreign currency exchange rates in 2025. Our net earnings were $705.1 million in 2025 compared to $903.8 million in 2024.
The expenses were higher in 2024 compared to 2023 primarily due to additional expenses related to the 2023 Restructuring Plan that had just been initiated at the end of 2023 and additional expenses related to our U.S. and Canada ERP implementation. For more information regarding these expenses, see Note 5 to our consolidated financial statements.
The expenses were lower in 2025 compared to 2024 primarily due to lower expenses related to our U.S. and Canada ERP implementation and other optimization projects. For more information regarding these expenses, see Note 4 to our consolidated financial statements. Acquisition, integration, divestiture and related expenses increased in 2025 when compared to 2024 due to the acquisitions made in 2025.
EXECUTIVE LEVEL OVERVIEW 2024 Financial Highlights In 2024, our net sales increased 3.8 percent when compared to 2023. Net sales growth was driven by a combination of market growth, new product introductions, positive price realization and commercial execution across the organization.
EXECUTIVE LEVEL OVERVIEW 2025 Financial Highlights In 2025, our net sales increased 7.2 percent when compared to 2024. Net sales growth was driven by a combination of our acquisition of Paragon 28, Inc.
However, we estimate these favorable items may be partially offset by higher intangible asset amortization, higher net interest expense due to higher interest rates and a higher estimated effective tax rate due to favorable 2024 adjustments that are not expected to recur. 30 RESULTS OF OPERATIONS We review sales by two geographies, the United States and International, and by the following product categories: Knees; Hips; S.E.T.
However, we expect that these favorable items may be partially offset by the impact from inflation, investments in our U.S. commercial sales channel, higher net interest expense and a higher estimated effective tax rate due to favorable 2025 adjustments that are not expected to recur.
See Note 3 to our consolidated financial statements for additional information. The following discussion and analysis is presented on a continuing operations basis unless otherwise noted. The following discussion and analysis should be read in conjunction with the consolidated financial statements and the corresponding notes included elsewhere in this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the consolidated financial statements and the corresponding notes included elsewhere in this Annual Report on Form 10-K. Amounts reported in millions within this Annual Report on Form 10-K are computed based on the actual amounts.
Pricing Trends Global selling prices had a positive effect of 0.6 percent on year-over-year sales growth in 2024. The majority of countries in which we operate continue to experience pricing pressure from local hospitals, health systems, and governmental healthcare cost containment efforts.
The majority of countries in which we operate continue to experience pricing pressure from local hospitals, health systems, and governmental healthcare cost containment efforts. However, we have had success in offsetting negative effects of pricing pressure due to internal initiatives and being able to pass some inflationary impacts on to customers.
The decrease in 2024 was primarily due to a higher volume of accounts payable payments near the end of 2024 relative to 2023 as well as higher bonus, income tax and restructuring-related payments. These unfavorable items were partially offset by lower inventory investments in 2024 when compared to 2023.
The increase in 2025 was primarily due to higher net sales, favorable timing of accounts payable relative to 2024 and lower bonus and restructuring-related payments. These favorable items were partially offset by costs related to closing the Paragon 28 and Monogram acquisitions, U.S. tariffs and higher interest and tax-related payments.
Intangible asset amortization expense increased in amount and as a percentage of net sales in 2024 when compared to 2023 due to acquisitions we made in 2024 and 2023, the buyout of certain royalty-related licensing agreements as described above and other technology-based asset purchases in 2024.
The increase as a percentage of net sales was primarily due to the inventory charges, tariffs and inventory step-up, but was partially offset by a favorable mix shift to higher margin products and markets. 33 Intangible asset amortization expense increased in amount and as a percentage of net sales in 2025 when compared to 2024 due to the Paragon 28 acquisition, other acquisitions and technology-based asset purchases we made in 2024.
Technology & Data, Bone Cement and Surgical product category net sales increased by 0.7 percent in 2024 when compared to 2023 primarily due to higher net sales for our ROSA robot in the first half of the year, but was partially offset by the operational challenges from our ERP system implementation.
Technology & Data, Bone Cement and Surgical product category net sales increased by 4.0 percent in 2025 when compared to 2024, primarily due to new product introductions.
As discussed in Note 17 to our consolidated financial statements, the IRS has issued proposed adjustments for years 2013 through 2015 and for years 2016 through 2019. We have disputed these proposed adjustments and intend to continue to vigorously defend our positions.
We estimate the program resulted in a reduction of gross annual pre-tax operating expenses of approximately $180 million relative to the 2019 baseline expenses by the end of 2025. As discussed in Note 16 to our consolidated financial statements, the IRS has issued proposed adjustments for years 2013 through 2015 and for years 2016 through 2019.
Interest expense, net, increased in 2024 when compared to 2023, primarily from higher average debt balances, higher interest rates on new debt issued in 2024 that replaced debt that matured and higher losses incurred on our fixed-to-variable interest rate swaps in 2024.
Interest expense, net, increased in 2025 when compared to 2024, primarily due to higher average debt balances outstanding related to the Paragon 28 acquisition and new borrowings in late 2024 that replaced debt with lower interest rates.
In 2024, we issued senior notes for $1,436.3 million and used the proceeds, along with cash on hand, to repurchase $868.0 million of our common stock, redeem $850.0 of our senior notes and repay a net $50.0 million under an uncommitted credit facility.
We used these proceeds, along with cash on hand, for the acquisition of Paragon 28, to redeem $1,463.0 million of senior notes, and to repurchase $487.0 million of our common stock. We place our cash and cash equivalents in highly-rated financial institutions and limit the amount of credit exposure to any one entity.
In our original estimates, we expected to reduce gross annual pre-tax operating expenses by approximately $180 million to $280 million relative to the 2019 baseline expenses by the end of 2023 as benefits under the 2019 Restructuring Plan were realized.
We estimate gross annual pre-tax operating expenses were reduced by $175 million to $200 million relative to the 2023 baseline expenses by the end of 2025. The 2021 Restructuring Plan was completed by the end of 2024, resulting in $169 million of total pre-tax charges.
S.E.T. net sales increased by 6.5 percent in 2024 when compared to 2023. S.E.T. net sales growth was primarily driven by net sales growth in CMFT, sports medicine and upper extremities products of 14.0 percent, 13.1 percent and 6.0 percent, respectively, partially offset by a 0.5 percent decline in net sales of trauma products.
S.E.T. net sales growth was primarily driven by the Paragon 28 acquisition, which had a positive effect of 10.5 percent on net sales growth, as well as net sales growth in CMFT, upper extremities and sports medicine products of 12.5 percent, 8.2 percent and 5.5 percent, respectively.
In addition, in 2024 we paid $276.3 million related to acquisitions and $153.0 million to acquire the ownership rights or gain access to various technologies that were recognized as intangible assets. Cash flows used in financing activities from continuing operations were $484.5 million in 2024 compared to $763.5 million in 2023.
In 2025 we paid $1,393.2 million, net of cash acquired, for the acquisitions of Paragon 28 and Monogram, as well as paid $52.4 million related to the ownership rights or to gain access to various technologies that were recognized as intangible assets.
As of December, 31, 2024, $68.7 million and $85.9 million of this amount is recorded in current income tax liabilities and non-current income tax liabilities, respectively, on our consolidated balance sheet. As discussed in Note 21 to our consolidated financial statements, we are involved in various litigation matters.
As discussed in Note 20 to our consolidated financial statements, we are involved in various litigation matters. We estimate the total liabilities for all litigation matters was $136.2 million as of December 31, 2025.
The decreases were driven by lower spending on our initial compliance with the EU MDR as we continue to make progress on the approvals of our products, and savings from our 2023 Restructuring Plan. Selling, general & administrative (“SG&A”) expenses increased in amount, but decreased as a percentage of net sales in 2024 compared to 2023.
The decrease in R&D expenses as a percentage of net sales was due to our restructuring programs as well as controlling spend as net sales increased. Selling, general & administrative (“SG&A”) expenses increased in amount and as a percentage of net sales in 2025 compared to 2024.
Market growth and new product introductions contributed positively to volume and mix trends, but were 31 partially offset by the operational challenges resulting from our ERP implementation. Market growth is being driven by an aging and active population, technological advancements, and data showcasing positive clinical outcomes among other factors.
Market growth is being driven by an aging and active population, technological advancements, and data showcasing positive clinical outcomes, among other factors. 32 Pricing Trends Global selling prices had a minimal effect on year-over-year sales growth in 2025.
Management evaluates the need for changes to the net realizable values of inventory and instruments based on market conditions, competitive offerings and other factors on a regular basis. Income Taxes - Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid.
Obsolete or discontinued items are generally destroyed and completely written off. Management evaluates the need for changes to the net realizable values of inventory and instruments based on market conditions, competitive offerings and other factors on a regular basis. For example, in December 2025, management decided on a plan to discontinue selling certain products by 2032.
However, operating profit as a percentage of net sales decreased slightly due to investments in instruments to support new product introductions and higher bad debt-related charges in 2024. EMEA In EMEA, operating profit and operating profit as a percentage of net sales increased in 2024 when compared to 2023.
Operating profit as a percentage of net sales decreased because of the higher manufacturing costs as well as the fact that the operating profit contributed by Paragon 28 is at a lower operating profit margin. EMEA In EMEA, operating profit increased slightly, but operating profit as a percentage of net sales decreased, in 2025 when compared to 2024.
Acquisition, integration, divestiture and related expenses increased in 2024 when compared to 2023 due to the acquisitions made in 2024 as well as the fact that the 2023 acquisitions only had a partial year of integration costs in 2023. 33 Other Expense, net, Interest Expense, net, and Income Taxes In 2024, we incurred a loss of $31.1 million in our other expense, net compared to a loss of $9.3 million in 2023.
These costs were partially offset by $77.1 million of net gains related declines in the estimated fair values of contingent consideration from acquisitions due to updated forecasts of net sales. 34 Other Income (Expense), net, Interest Expense, net, and Income Taxes In 2025, we recognized a gain of $25.5 million in our other income (expense), net compared to a loss of $31.1 million in 2024.
Removed
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations On March 1, 2022, we completed the spinoff of our spine and dental businesses into ZimVie. The historical results of our spine and dental businesses have been reflected as discontinued operations in our consolidated financial statements in our 2022 results through the date of the spinoff.
Added
(“Paragon 28”) on April 21, 2025, market growth, new product introductions, and lower net sales in the prior year due to operational challenges fulfilling customer orders as a consequence of a new enterprise resource planning ("ERP") software system implementation. Paragon 28 had a positive impact on our net sales growth of 2.5 percent in 2025.
Removed
The Current Report on Form 8-K filed on August 7, 2024 was filed solely to recast financial information and related disclosures contained in our Annual Report on Form 10-K for the year ended December 31, 2023 to reflect changes to the operating profit measures of our operating segments.
Added
The decline in net earnings was driven by inventory and instrument charges of approximately $170 million related to certain product lines we intend to discontinue; costs related to the acquisition of Paragon 28 and the acquisition of Monogram Technologies Inc.
Removed
These favorable items were negatively impacted by our transition in July 2024 to a new enterprise resource planning ("ERP") software system for a significant portion of our U.S. and Canada sales and commercial operations. As a result of this ERP implementation, we experienced operational challenges which affected our ability to fulfill certain customer orders.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe believe we do not have any significant credit risk on our cash and cash equivalents or derivative instruments. 39 Our concentrations of credit risks with respect to trade accounts receivable is limited due to the large number of customers and their dispersion across a number of geographic areas and by frequent monitoring of the creditworthiness of the customers to whom credit is granted in the normal course of business.
Biggest changeOur concentrations of credit risks with respect to trade accounts receivable is limited due to the large number of customers and their dispersion across a number of geographic areas and by frequent monitoring of the creditworthiness of the customers to whom credit is granted in the normal course of business.
We maintain written policies and procedures governing our risk management activities. Our policy requires that critical terms of hedging instruments be the same as hedged forecasted transactions. On this basis, with respect to 38 cash flow hedges, changes in cash flows attributable to hedged transactions are generally expected to be offset by changes in the fair value of hedge instruments.
We maintain written policies and procedures governing our risk management activities. Our policy requires that critical terms of hedging instruments be the same as hedged forecasted transactions. On this basis, with respect to cash flow hedges, changes in cash flows attributable to hedged transactions are generally expected to be offset by changes in the fair value of hedge instruments.
We manage our exposure to interest rate risks through our regular operations and financing activities. We invest our cash and cash equivalents primarily in highly-rated corporate commercial paper and bank deposits. The primary investment objective is to ensure capital preservation. Currently, we do not use derivative financial instruments in our investment portfolio.
We manage our exposure to interest rate risks through our regular operations and financing activities. 40 We invest our cash and cash equivalents primarily in highly-rated corporate commercial paper and bank deposits. The primary investment objective is to ensure capital preservation. Currently, we do not use derivative financial instruments in our investment portfolio.
As part of our risk management program, we also perform sensitivity analyses to assess potential changes in revenue, operating results, cash flows and financial position relating to hypothetical movements in currency exchange rates. A sensitivity analysis of changes in the fair value of foreign currency exchange forward contracts outstanding at December 31, 2024 indicated that, if the U.S.
As part of our risk management program, we also perform sensitivity analyses to assess potential changes in revenue, operating results, cash flows and financial position relating to hypothetical movements in currency exchange rates. A sensitivity analysis of changes in the fair value of foreign currency exchange forward contracts outstanding at December 31, 2025 indicated that, if the U.S.
As a result, foreign currency remeasurement gains/losses recognized in earnings are generally offset with gains/losses on the foreign currency forward exchange contracts in the same reporting period. For details about these and other financial instruments, including fair value methodologies, see Note 15 to our consolidated financial statements.
As a result, foreign currency remeasurement gains/losses recognized in earnings are generally offset with gains/losses on the foreign currency forward exchange contracts in the same reporting period. For details about these and other financial instruments, including fair value methodologies, see Note 14 to our consolidated financial statements.
The majority of our debt is fixed-rate debt and therefore is not exposed to changes in interest rates. Based upon our overall interest rate exposure as of December 31, 2024, 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.
The majority of our debt is fixed-rate debt and therefore is not exposed to changes in interest rates. Based upon our overall interest rate exposure as of December 31, 2025, 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.
While we are exposed to risks from the broader healthcare industry in Europe and around the world, there is no significant net exposure due to any individual customer. Exposure to credit risk is controlled through credit approvals, credit limits and monitoring procedures, and we believe that reserves for losses are adequate. 40
While we are exposed to risks from the broader healthcare industry in Europe and around the world, there is no significant net exposure due to any individual customer. Exposure to credit risk is controlled through credit approvals, credit limits and monitoring procedures, and we believe that reserves for losses are adequate. 41
To reduce the potential effects of foreign currency exchange rate movements on net earnings, we enter into derivative financial instruments in the form of foreign currency exchange forward contracts with major financial institutions. See Note 15 to our consolidated financial statements for further details on our foreign currency exchange risk exposure and management.
To reduce the potential effects of foreign currency exchange rate movements on net earnings, we enter into derivative financial instruments in the form of foreign currency exchange forward contracts with major financial institutions. See Note 14 to our consolidated financial statements for further details on our foreign currency exchange risk exposure and management.
Consequently, foreign currency exchange contracts would not subject us to material risk due to exchange rate movements because gains and losses on these contracts offset gains and losses on the assets, liabilities and transactions being hedged. We had net assets, excluding goodwill and intangible assets, in legal entities with non-U.S. Dollar functional currencies of $1,950.5 million at December 31, 2024.
Consequently, foreign currency exchange contracts would not subject us to material risk due to exchange rate movements because gains and losses on these contracts offset gains and losses on the assets, liabilities and transactions being hedged. We had net assets, excluding goodwill and intangible assets, in legal entities with non-U.S. Dollar functional currencies of $1,490.4 million at December 31, 2025.
Dollar uniformly 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 affect earnings in a range of a decrease of approximately $85 million to an increase of approximately $84 million before income taxes in periods through June 2027.
Dollar uniformly 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 affect earnings in a range of a decrease of approximately $109 million to an increase of approximately $107 million before income taxes in periods through April 2028.
We place our cash and cash equivalents and enter into derivative transactions with highly-rated financial institutions and limit the amount of credit exposure to any one entity.
We place our cash and cash equivalents and enter into derivative transactions with highly-rated financial institutions and limit the amount of credit exposure to any one entity. We believe we do not have any significant credit risk on our cash and cash equivalents or derivative instruments.

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