1136869--2/29/2008--ZIMMER_HOLDINGS

related topics

{product, market, service}

{financial, litigation, operation}

{customer, product, revenue}

{property, intellectual, protect}

{operation, international, foreign}

{acquisition, growth, future}

{regulation, government, change}

{product, liability, claim}

{product, candidate, development}

{cost, operation, labor}

If we are not able to fulfill or otherwise resolve our existing royalty and other payment obligations to consulting surgeons and institutions, our ability to maintain our existing intellectual property rights and obtain future rights may be impaired. Our ongoing efforts to enhance our Corporate Compliance Program globally will require cooperation by many employees and others and may divert substantial financial and human resources from our other business activities. 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. If we are not able to fulfill or otherwise resolve our existing royalty and other payment obligations to consulting surgeons and institutions, our ability to maintain our existing intellectual property rights and obtain future rights may be impaired. Our ongoing efforts to enhance our Corporate Compliance Program globally will require cooperation by many employees and others and may divert substantial financial and human resources from our other business activities. 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 and may cause our profitability to decline. 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 are subject to risks arising from currency exchange rate fluctuations, which can increase our costs and may cause our profitability to decline. 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 complete additional acquisitions, which could increase our costs or liabilities or be disruptive. If we are unable to form strategic alliances, or if our strategic alliances fail to achieve their objectives, our operating results will be negatively impacted. We depend on a limited number of suppliers for some key raw materials and outsourced activities. Our future profitability may be affected by changes to our product category and region sales mix. RISKS RELATED TO OUR INDUSTRY The ongoing informal investigation by the United States 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 may complete additional acquisitions, which could increase our costs or liabilities or be disruptive. If we are unable to form strategic alliances, or if our strategic alliances fail to achieve their objectives, our operating results will be negatively impacted. We depend on a limited number of suppliers for some key raw materials and outsourced activities. Our future profitability may be affected by changes to our product category and region sales mix. RISKS RELATED TO OUR INDUSTRY The ongoing informal investigation by the United States 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. Our success depends on our ability to effectively develop and market our products against those of our competitors. 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. Our success depends on our ability to effectively develop and market our products against those of our competitors.

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1136869--2/29/2008--ZIMMER_HOLDINGS_INC