Zimmer Biomet Holdings Inc.: 10-K Risk Factor Changes

We purchase many of the materials and components used in manufacturing our products from third-party suppliers, and we outsource some key manufacturing activities. Certain of these materials and components and outsourced activities can only be obtained from a single source or a limited number of sources due to quality considerations, expertise, costs or constraints resulting from regulatory requirements. In certain cases, we may not be able to establish additional or replacement suppliers for such materials or components or outsourced activities in a timely or cost effective manner, due to market constraints or as a result of FDA or other worldwide regulations that require validation of materials and components prior to their use in our products and the complex nature of our and many of our suppliers' manufacturing processes and the need for clearance or approval of significant changes by FDA and other worldwide regulatory bodies prior to implementation. A reduction or interruption in the supply of materials or components used in manufacturing our products, such as due to loss of access to one or more suppliers; an inability to timely develop and validate alternative sources if required; or a significant increase in the price of such materials or components could adversely affect our business, financial condition and results of operations. In addition, many of our products require sterilization prior to sale, and we utilize a mix of internal resources and contract sterilizers to perform this service. We also provide contract sterilization services to certain of our customers. To the extent we or our contract sterilizers are or may become unable to sterilize our products or provide sterilization services to us or to our customers, whether caused by insufficient capacity; unavailability of materials for sterilization; regulatory or other restrictions on the use of certain sterilizing methods such as use of ethylene oxide; the bankruptcy or other financial constraints of the sterilizer (as we experienced with respect to one sterilization supplier in 2024); or otherwise, we may be unable to transition to other contract sterilizers, sterilizer locations or sterilization methods in a timely or cost effective manner or at all, which could have a material impact on our results of operations and financial condition.

We purchase many of the materials and components used in manufacturing our products from third-party suppliers, and we outsource some key manufacturing activities. Certain of these materials and components and outsourced activities can only be obtained from a single source or a limited number of sources due to quality considerations, expertise, costs or constraints resulting from regulatory requirements. In certain cases, we may not be able to establish additional or replacement suppliers for such materials or components or outsourced activities in a timely or cost effective manner, due to market constraints or as a result of FDA or other worldwide regulations that require validation of materials and components prior to their use in our products and the complex nature of our and many of our suppliers' manufacturing processes and the need for clearance or approval of significant changes by FDA and other worldwide regulatory bodies prior to implementation. A reduction or interruption in the supply of materials or components used in manufacturing our products, such as due to loss of access to one or more suppliers; an inability to timely develop and validate alternative sources if required; or a significant increase in the price of such materials or components could adversely affect our business, financial condition and results of operations. In addition, many of our products require sterilization prior to sale, and we utilize a mix of internal resources and contract sterilizers to perform this service. We also provide sterilization services to certain of our customers. To the extent we or our contract sterilizers are unable to sterilize our products or provide sterilization services to our customers, whether caused by capacity, availability of materials for sterilization, and regulatory or other restrictions on the use of ethylene oxide or otherwise, we may be unable to transition to other contract sterilizers, sterilizer locations or sterilization methods in a timely or cost effective manner or at all, which could have a material impact on our results of operations and financial condition. Moreover, we are subject to the SEC’s rule regarding disclosure of the use of certain minerals, known as “conflict minerals” (tantalum, tin and tungsten (or their ores) and gold), which are mined from the Democratic Republic of the Congo and adjoining countries. This rule could adversely affect the sourcing, availability and pricing of materials used in the manufacture of our products, which could adversely affect our manufacturing operations and our profitability. In addition, we are incurring additional costs to comply with this rule, including costs related to determining the source of any relevant minerals, metals and other materials used in our products. We have a complex supply chain, and we may not be able to sufficiently verify the origins of the minerals and metals used in our products through our due diligence procedures. As a result, we may face reputational challenges with our customers and other stakeholders.

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. 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; 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; 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; differing local product preferences, local product requirements and “buy local” initiatives; •fluctuations in foreign currency exchange rates; 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; 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.; 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.; 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; 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; extraterritorial effects of U.S. laws such as the FCPA; •effects of foreign anti-corruption laws, such as the United Kingdom Bribery Act; effects of foreign anti-corruption laws, such as the United Kingdom Bribery Act; •difficulty in staffing and managing foreign operations; difficulty in staffing and managing foreign operations; •labor force instability; labor force instability; •increased tax liabilities under foreign tax laws or changes thereto; and 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. political, social and economic instability and uncertainty, including wars, other conflict and sovereign debt issues. 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. 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. 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. Sanctions and other civil, political and economic effects of such conflicts are likely to have adverse impacts upon us. Additionally, other trade disruptions include supply chain continuity disruption; inflationary pressures and increased costs of raw materials and inputs; manufacturing or shipping delays; increased shipping costs and transit delays (such as experienced due to attacks on shipping transiting the Red Sea); and increased disruptions and delays affecting our ability to operate in and to collect payment for our products and services in particular markets.

We sell our products in more than 100 countries and derived approximately 42 percent of our net sales in 2023 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. Our international operations are, and will continue to be, subject to a number of risks and potential costs, including: 20 20 •changes to trade restrictions and protection measures, new import or export requirements, new or increased tariffs, trade embargoes and sanctions and other trade barriers, which 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 trade restrictions and protection measures, new import or export requirements, new or increased tariffs, trade embargoes and sanctions and other trade barriers, which 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 in foreign medical reimbursement policies and programs; 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; differences in and changes to foreign regulatory requirements, such as more stringent requirements for regulatory clearance of products; •differing local product preferences and product requirements; differing local product preferences and product requirements; •fluctuations in foreign currency exchange rates; 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; 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.; 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.; foreign exchange controls that might prevent us from repatriating cash earned in countries outside the U.S.; •complex data privacy and cybersecurity requirements and labor relations laws; complex data privacy and cybersecurity requirements and labor relations laws; •extraterritorial effects of U.S. laws such as the FCPA; extraterritorial effects of U.S. laws such as the FCPA; •effects of foreign anti-corruption laws, such as the UK Bribery Act; effects of foreign anti-corruption laws, such as the UK Bribery Act; •difficulty in staffing and managing foreign operations; difficulty in staffing and managing foreign operations; •labor force instability; labor force instability; •increased tax liabilities under foreign tax laws or changes thereto; and 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. political, social and economic instability and uncertainty, including wars, other conflict and sovereign debt issues. 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. Wars and other conflicts may increase certain of these risks and may adversely affect our business and financial performance, including by limiting our ability to operate in, or export from, certain markets. Losing access to such markets or to exports from such markets may have a material adverse effect on our business, and may limit our ability to operate, both in the affected market and globally. 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. Sanctions and other civil, political and economic effects of such conflicts are likely to have adverse impacts upon us. For example, we produced implants and instruments in China that supported a significant portion of our global total profit in 2023; if trade restrictions or other barriers arose that limited our ability to export from China and we are unable to fully mitigate the risk or find alternative sources of supply, such trade restrictions could have a material and adverse effect on our sales and results of operations. Additionally, other trade disruptions include supply chain continuity disruption; inflationary pressures and increased costs of raw materials and inputs; manufacturing or shipping delays; increased shipping costs and transit delays (such as experienced due to attacks on shipping transiting the Red Sea); and increased disruptions and delays affecting our ability to operate in and to collect payment for our products and services in particular markets.

Our operations expose us to risks from business interruptions that may arise from a variety of sources, including public health crises; supply chain disruptions; loss of or limitations on access to certain markets due to trade and tariff disputes and disruptions or national, regional and global conflicts; adverse economic developments; healthcare staffing challenges; government shutdowns; natural disasters; and other events that can, singly or in combination with other factors, adversely affect our business and financial results. There can be no assurance that we will successfully manage such risks without adverse impacts to our business or financial results.

Our operations expose us to risks from business interruptions that may arise from a variety of sources, including public health crises; supply chain disruptions; loss of or limitations on access to certain markets due to trade and tariff disputes and disruptions or national, regional and global conflicts; adverse economic developments; healthcare staffing challenges; government shutdowns; natural disasters; and other events that can, singly or in combination with other factors, adversely affect our business and financial results. There can be no assurance that we will successfully manage risks, such as experienced during the COVID-19 pandemic, without adverse impacts to our business or financial results. Moreover, the occurrence of any one or more risks described in these Risk Factors or 17 17 otherwise may have unpredictable effects on other risks, our business, financial or operational results which may be comparable to, or more adverse than, those we experienced in connection with the COVID-19 pandemic.

Our future performance depends on the continued skills, experiences, competencies and services of our senior management, key employees and key third parties (including independent distributors and sales agents), and our ability to attract, retain, develop and motivate such talent. We rely on certain employees and third parties for research and development; operations; quality assurance; and the distribution, marketing and sales of our products. If we fail to retain our senior management, key employees and key third parties, our revenue and profitability may decline, and our business may be otherwise adversely affected. Additionally, certain of our key employees and third parties have detailed knowledge of our products and instruments and have developed professional relationships with existing and potential customers due to this knowledge. 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. Our ability to attract and retain key employee and third-party talent is dependent on a number of factors, including prevailing market conditions, our ability to offer competitive compensation packages, our ability to be perceived as a preferred place to work and the contract terms we offer to third parties. 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. 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 14 14

Our future performance depends, in large part, on the continued skills, experiences, competencies and services of our senior management and other key talent, including our ability to attract, retain, develop and motivate our highly skilled employees, senior management, independent agents and distributors. Competition for talent in our business is 14 14 significant. Our ability to attract and retain key talent, in particular senior management, is dependent on a number of factors, including prevailing market conditions, our ability to offer competitive compensation packages and our ability to be perceived as a preferred place to work. Effective succession planning is also important to our long-term success; failure to ensure effective transfer of knowledge and orderly transitions involving key employees could hinder our business.