Zimmer Holdings, Inc. Reports Second Quarter 2008 Financial Results

Zimmer Holdings, Inc. (NYSE: ZMH; SWX: ZMH) today reported financialresults for the quarter ended June 30, 2008. The Company reported secondquarter net sales of $1.08 billion, an increase of 11% reported and 5%constant currency over the second quarter of 2007. Diluted earnings per sharefor the quarter were $0.99 reported and $1.03 adjusted, an increase of 5%adjusted over the prior year period.

"During the quarter, our worldwide knee sales grew by 10% constantcurrency as we continue to expand our industry-leading knee business byoffering surgeons a comprehensive portfolio of proven designs and innovativenew treatment options," said David Dvorak, Zimmer President and CEO. "We aremaking substantial progress on our operating and infrastructure initiatives,in a manner designed to position Zimmer for sustainable growth in an expandinghealth care market. We have also been executing plans under our enhancedcompliance model, including holding numerous productive meetings with surgeonsto discuss how we will continue to collaborate to improve patient care."

The Company resumed Zimmer Institute training activities, which willsupport the ongoing launches of several key products, including the Zimmer(R)NexGen(R) LPS-Flex Mobile Knee, the Gender Solutions(TM) Natural-Knee(R) Flexand the Gender Solutions(TM) Patello-Femoral Joint System in knees. Hipproducts include the VerSys(R) M/L Taper Hip with Kinectiv(TM) Technology andthe Fitmore(TM) Hip stem. Absent any unforeseen events, the Companyanticipates FDA clearance to market the EPOCH(R) Gender Solutions Hip duringthe second half of the year.

During the quarter, the Company utilized $276 million of cash and $220million in borrowings to acquire 6.9 million shares. The Company completedits $1 billion stock repurchase program, which was scheduled to expire onDecember 31, 2008, and initiated the $1.25 billion repurchase programannounced earlier in the year. Since its first repurchase program in 2006,Zimmer has used nearly $2 billion in internally generated funds to acquiremore than 10% of its shares that were outstanding as of the end of 2005.

Sales Tables

The following tables provide sales results by geographic segment andproduct category, as well as the percentage change compared to the prior yearquarter and six months on both a reported and constant currency basis.

Net earnings for the second quarter were $227 million on a reported basisand $237 million on an adjusted basis, an increase of 1% adjusted over theprior year period. Operating cash flow for the second quarter was $281million. Net earnings for the first six months of 2008 were $466 million on areported basis and were $481 million on an adjusted basis, an increase of 2%adjusted over the prior year period.

Durom Acetabular Component

Zimmer is temporarily suspending marketing and distribution of theDurom(R) Acetabular Component (Durom Cup) in the U.S. on a voluntary basis,while the Company updates labeling to provide more detailed surgical techniqueinstructions to surgeons and implements its surgical training program in theU.S. The Durom Cup will continue to be marketed without interruption outsidethe U.S.

While many surgeons have had success implanting the Durom Cup since it waslaunched in the U.S. in 2006, a subset have reported cup loosenings andrevisions of the acetabular component used in total hip replacementprocedures. These results contrast with product experience in Europe, wherepost-marketing data continue to show excellent clinical outcomes since theproduct launched in 2003. Following a comprehensive review of clinicalexperience and product conformance to specifications in the U.S. and Europe,Zimmer has found no evidence of a defect in the materials, manufacture, ordesign of the implant. The Company has identified that surgeons who regularlyachieve the desired outcome with the