1136869--2/27/2009--ZIMMER_HOLDINGS

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{property, intellectual, protect}

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{operation, international, foreign}

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{condition, economic, financial}

{cost, contract, operation}

{acquisition, growth, future}

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We could be subject to further governmental investigations or actions by other third parties based on allegations of wrongdoing similar to those made by the U.S. Attorney. If we are not able to fulfill or otherwise resolve our existing royalty and other payment obligations to healthcare professional consultants and institutions, our ability to maintain our existing intellectual property rights and obtain future rights may be impaired. Our temporary suspension of the U.S. marketing and distribution of one of our hip products has adversely affected sales, resulted in claims and may adversely affect our ability to compete in the growing hip resurfacing market in the U.S. The implementation of our enhanced global compliance program is requiring us to devote substantial resources, is disruptive to normal business activities and may place us at a competitive disadvantage. We believe we have lost market share as a result of recent events. If we are not able to recover or grow our market share, our operating results could be materially adversely affected. If we fail to retain the independent agents and distributors upon whom we rely heavily to market our products, customers may not buy our products and our revenue and profitability may decline. If we do not introduce new products in a timely manner, our products may become obsolete over time, customers may not buy our products and our revenue and profitability may decline. We conduct a significant amount of our sales activity outside of the United States, which subjects us to additional business risks and may cause our profitability to decline due to increased costs. We are subject to risks arising from currency exchange rate fluctuations, which can increase our costs, cause our profitability to decline and expose us to counterparty risks. We may fail to adequately protect our proprietary technology and other intellectual property, which would allow competitors or others to take advantage of our research and development efforts. We may be subject to intellectual property litigation and infringement claims, which could cause us to incur significant expenses or prevent us from selling our products. We may make additional acquisitions or enter into strategic alliances that could increase our costs or liabilities or be disruptive. We depend on a limited number of suppliers for some key raw materials and outsourced activities. We are subject to putative stockholder class action lawsuits that could be costly to defend and distracting to management. RISKS RELATED TO OUR INDUSTRY The ongoing informal investigation by the U.S. Securities and Exchange Commission regarding potential violations of the Foreign Corrupt Practices Act in the sale of medical devices in a number of foreign countries by companies in the medical device industry could have a material adverse effect on our business, financial condition and cash flows. We are subject to healthcare fraud and abuse regulations on an ongoing basis that could require us to change our business practices and restrict our operations in the future. If third-party payors decline to reimburse our customers for our products or reduce reimbursement levels, the demand for our products may decline and our ability to sell our products profitably may be harmed. The ongoing cost-containment efforts of healthcare purchasing organizations may have a material adverse effect on our results of operations. Continuing weakness in the global economy is likely to adversely affect our business until an economic recovery is underway. Our success depends on our ability to effectively develop and market our products against those of our competitors.

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1136869--2/27/2009--ZIMMER_HOLDINGS_INC