July 24, 2018

VIA EDGAR

Kevin J. Kuhar

Accounting Branch Chief

Office of Electronics and Machinery

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Form 10-K for the Fiscal Year Ended December 31, 2017

Filed February 27, 2018

File No. 1-16407

Dear Mr. Kuhar:

This letter is submitted in response to the oral comments provided by the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission during a telephone conference on June 21, 2018 with respect to review of the above-referenced filing of Zimmer Biomet Holdings, Inc. (“we,” “us,” “our,” “Zimmer Biomet” or the “Company”).  For your convenience, we have indicated the substance of the Staff’s comments in bold-face below, and our response thereto follows each comment.

Form 10-K for the Fiscal Year Ended December 31, 2017

SEC Oral Comment #1:  

We note your response to our prior comment 2.  In future filings, please revise the presentation of the statement of earnings so that material dissimilar expenses and costs are not aggregated in a single line item.

Company Response: In future filings, we will report material other general expenses in separate line items with appropriate descriptive captions as allowed under Rule 5-03(b)(6) of Regulation S-X and will include other expenses that we had previously reported in the “Special items” line item in the “Research and development” and “Selling, general and administrative” line items, as applicable.

As a result, we propose to prospectively add two new line items pursuant to Rule 5-03(b)(6) of Regulation S-X for “Acquisition and integration” expenses and “Quality remediation” expenses and include an explanation of what these financial statement

Kevin J. Kuhar

U.S. Securities and Exchange Commission

July 24, 2018

Page 2

line items represent in our notes to the financial statements.

The following shows how these changes would have affected our 2017 and 2016 Statement of Earnings included in our Form 10-K for the fiscal year ended December 31, 2017 (the “2017 Form 10-K”), if these expenses had been presented in the proposed manner.  We propose to utilize the presentation in the “Recast” column prospectively in our 2018 earnings releases and quarterly and annual filings, beginning with our earnings release for the quarter ended June 30, 2018:

In future filings, the notes to the financial statements will describe these classification changes.

Kevin J. Kuhar

U.S. Securities and Exchange Commission

July 24, 2018

Page 3

SEC Oral Comment #2:  

We note that you exclude "special items" from your adjusted  non-GAAP income measure.  Please explain to us why these are not normal, recurring, cash operating expenses necessary to operate your business.  Refer to Question 100.01 of the updated Non-GAAP Compliance and Disclosure Interpretations issued on May 17, 2016.

Company Response: We have reviewed Question 100.01 of the Non-GAAP Compliance and Disclosure Interpretations issued on May 17, 2016 and believe our presentation of non-GAAP measures is not misleading.  

We use non-GAAP financial measures internally to evaluate the performance of the business.  Additionally, we believe these non-GAAP measures provide meaningful incremental information to investors to consider when evaluating the performance of the Company.  We believe these measures offer the ability to make period-to-period comparisons that are not impacted by certain items that can cause dramatic changes in reported income that does not impact the fundamentals of our operations.  It enables the evaluation of operating results and trend analysis by allowing a reader to better identify operating trends that may otherwise be masked or distorted by these types of items that are excluded from the non-GAAP measures.  In addition, non-GAAP operating profit and diluted net earnings per share are used as performance metrics for our incentive compensation programs.

The expenses or gains we exclude in our non-GAAP financial measures are the result of specific events or projects.  Additionally, many of these expenses or gains are highly variable and difficult to predict.  We review these events and projects from both a qualitative and quantitative perspective to identify whether or not we believe adjusting the expenses or gains will provide our investors with useful incremental information.  While some of these events or projects may be of a general nature that occur on a regular basis, such as acquisitions, the specific events or projects have different characteristics, frequency and impact, and therefore, are excluded in our non-GAAP financial measures.  Moreover, we expect that we will not continue to incur the expenses or gains we exclude after the event or project is complete.

The following is a further description of the material expenses or gains we have excluded from our non-GAAP financial measures:

Acquisition and integration

Acquisitions can vary in frequency and complexity and have significantly different impacts to our financial results.  For the periods presented in our 2017 Form 10-K, the

Kevin J. Kuhar

U.S. Securities and Exchange Commission

July 24, 2018

Page 4

acquisition and integration expenses we have excluded from our non-GAAP financial measures resulted from our merger with Biomet in 2015 and various acquisitions we consummated in 2016.  For Biomet, we have detailed integration roadmaps that cover a three year period from the merger date to accomplish the tasks we feel are necessary to integrate the businesses.  For the various 2016 acquisitions, we also have integration plans that are necessary to integrate the businesses.  As a result, by excluding acquisition and related integration costs, our investors can make period-to-period comparisons that do not include the variability of these expenses.    

Quality remediation

As discussed in Note 19 to our Form 10-K for the year ended December 31, 2017, we are addressing inspectional observations on Form 483 issued by the U.S. Food and Drug Administration (“FDA”) following its inspections of our Warsaw North Campus facility, among other matters.  This quality remediation has required us to devote significant financial resources and is for a discrete period of time.  A significant portion of the expenses relate to remediating previous records, documents and processes.  Any incremental expenses incurred as a result of the FDA inspections that relate to the production of products are included in the cost of inventory and are not excluded when presenting our non-GAAP financial measures.

Litigation      

We are involved in routine patent litigation, product liability litigation, commercial litigation and other various litigation matters.  We review litigation matters from both a qualitative and quantitative perspective to determine if excluding the losses or gains will provide our investors with useful incremental information.  Litigation matters can vary in their characteristics, frequency and significance to our operating results.  In the years under review by the Staff, the litigation charges excluded from our non-GAAP financial measures relate to product liability matters where we have received numerous claims on specific products.  Due to the complexities involved and claims filed in multiple districts, the expenses associated with these matters are significant to our operating results.  Once the litigation matter has been excluded from our non-GAAP financial measures in a particular period, any additional expenses or gains from changes in estimates are also excluded, even if they are not significant, to ensure consistency in our non-GAAP financial measures from period-to-period.  By excluding these litigation-related matters, our investors can make period-to-period comparisons that do not include the variability of these expenses and gains.

Deferred Prosecution Agreement

We are currently under a Deferred Prosecution Agreement (“DPA”) with the U.S. government related to certain Foreign Corrupt Practices Act matters involving Biomet and certain of its subsidiaries.  Under the DPA, which has a three-year term, we are

Kevin J. Kuhar

U.S. Securities and Exchange Commission

July 24, 2018

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subject to oversight by an independent compliance monitor for at least 12 months, which monitorship commenced in July 2017.  We exclude costs of complying with the DPA from our non-GAAP financial measures, including the fees paid to the independent compliance monitor and to external legal counsel assisting in the matter.  If we fully comply with all of our obligations under the DPA, it will expire at the conclusion of its term and we will no longer incur these expenses.

In light of the changes we are proposing to our Statement of Earnings and to provide additional clarity to investors on the expenses or gains we are excluding from our non-GAAP financial measures, we are proposing to prospectively modify our non-GAAP financial measure disclosures in the Management’s Discussion and Analysis section of our periodic reports, beginning with our Form 10-Q for the quarter ended June 30, 2018.  Exhibit 1 to this letter contains the proposed changes that would have appeared in our non-GAAP financial measure disclosures in our 2017 Form 10-K, if they had been presented in the proposed manner.  The specific non-GAAP financial measure disclosures in future filings will be based on the type and amount of expenses and gains that are being adjusted for in the applicable filing.    

Exhibit 1

Non-GAAP Operating Performance Measures

We use financial measures that differ from financial measures determined in accordance with GAAP to evaluate our operating performance.  These non-GAAP financial measures exclude the impact of inventory step-up; certain inventory and manufacturing-related charges connected to discontinuing certain product lines, quality enhancement and remediation efforts; intangible asset amortization; “Acquisition and integration;” “Quality remediation”; goodwill and intangible asset impairment; financing and other expenses/gains related to the Biomet merger and other acquisitions; debt extinguishment costs; the interest expense incurred on the senior notes issued in connection with the Biomet merger during the period prior to the consummation of the Biomet merger; any related effects on our income tax provision associated with these items; the effect of the 2017 Tax Act; and other certain tax adjustments.  Other certain tax adjustments include internal restructuring transactions that provide us access to cash in a tax efficient manner, resolution of certain matters with taxing authorities, favorable tax rate changes, adjustments to deferred tax liabilities recognized as part of acquisition-related accounting, the resolution of unrecognized tax positions established through goodwill as part of acquisition accounting and any tax item that would otherwise be distortive to the expected future tax rate.  

The expenses and gains we exclude from our non-GAAP financial measures are highly variable, difficult to predict and are significant enough to impact our reported operations for the applicable period.  The expenses and gains are related to specific events or projects that have a discrete life.  The life may vary from a specific event that is recognized at a point in time, or more complex projects that last for multiple years, such as integrating businesses we have acquired.  

We use non-GAAP financial measures internally to evaluate the performance of the business.  Additionally, we believe these non-GAAP measures provide meaningful incremental information to investors to consider when evaluating the performance of the Company.  We believe these measures offer the ability to make period-to-period comparisons that are not impacted by certain items that can cause dramatic changes in reported income that does not impact the fundamentals of our operations.  It enables the evaluation of operating results and trend analysis by allowing a reader to better identify operating trends that may otherwise be masked or distorted by these types of items that are excluded from the non-GAAP measures.  In addition, non-GAAP operating profit and diluted net earnings per share are used as performance metrics for our incentive compensation programs.

Our non-GAAP adjusted net earnings used for internal management purposes for the years ended December 31, 2017, 2016 and 2015 were $1,636.4 million, $1,610.8 million, and $1,310.5 million, respectively, and our non-GAAP adjusted diluted earnings per share were $8.03, $7.96, and $6.90, respectively.  

The following are reconciliations from our GAAP net earnings and diluted earnings per share to our non-GAAP adjusted net earnings and non-GAAP adjusted diluted earnings per share used for internal management purposes (in millions, except per share amounts).

The acquisition and integration expenses include the following types of expenses: