Operating profit

Abstract

Zimmer continued to achieve solid adjusted operating profit margins in 2014. The Company has recorded six consecutive quarters of year-over-year adjusted operating margin expansion through process-driven improvements that have delivered significant cost savings and efficiencies. Operating Cash Flow Zimmer's operating cash flows continued to support the ongoing commercialization of new offerings in 2014, while funding strategic investments and programs to enhance stockholder value, including increased dividends and a disciplined share repurchase program ahead of the transformational combination with Biomet. (1) " Constant Currency " refers to sales growth resulting from translating current and prior-period sales at the same predetermined foreign currency exchange rate. The translated results are then used to determine year-over-year percentage increases or decreases that exclude the effect of changes in foreign currency exchange rates. See the reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure on page 79. (2) " Adjusted " refers to performance measures that exclude inventory step-up and other inventory and manufacturing charges, special items, the provision for certain Durom ® Acetabular Component product claims, goodwill impairment, financing and other expenses related to the pending Biomet merger and certain tax adjustments. See the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures on page 79. % Change 2013-2014