Zimmer Biomet(ZBH) - 2024 Q4 - Annual Report

Financial Performance - In 2024, the company's net sales increased by 3.8% to $7,678.6 million compared to 2023, driven by market growth, new product introductions, and positive price realization [171]. - Net earnings for 2024 were$903.8 million, a decline from $1,024.0 million in 2023, primarily due to higher restructuring charges and intangible asset amortization [172]. - The company expects 2025 revenue growth of 1.0$219.0 million in 2024, up from $151.9 million in 2023, mainly due to the initiation of the 2023 Restructuring Plan [190]. Cash Flow and Investments - Cash flows from operating activities were$1,499.4 million in 2024, a decrease from $1,581.6 million in 2023, primarily due to higher payments for accounts payable and restructuring-related costs [203]. - Cash flows used in investing activities increased to$888.1 million in 2024 from $778.9 million in 2023, including$276.3 million for acquisitions and $153.0 million for technology access [204]. - As of December 31, 2024, the company had$525.5 million in cash and cash equivalents and $1.0 billion available to borrow under a revolving credit agreement [201]. - The company plans to acquire Paragon 28, Inc. for approximately$1.2 billion, expected to be funded through cash on hand and debt financing [211]. Tax and Shareholder Returns - The effective tax rate for 2024 was 12.7%, significantly higher than 4.0% in 2023, influenced by foreign rate differentials and changes in unrecognized tax benefits [194]. - A $2.0 billion share repurchase program was authorized in May 2024, with$868.0 million executed in 2024 to return cash to investors [214]. Restructuring Plans - The 2023 Restructuring Plan is expected to incur total pre-tax charges of approximately $120 million by the end of 2025, with$114 million already incurred through December 31, 2024 [215]. - The 2021 Restructuring Plan resulted in $169 million of total pre-tax charges and is estimated to have reduced gross annual pre-tax operating expenses by approximately$190 million relative to the 2021 baseline expenses by the end of 2024 [215]. - The 2019 Restructuring Plan is expected to incur total pre-tax restructuring charges of approximately $400 million by the end of 2025, with$368 million incurred through December 31, 2024 [215]. Liabilities and Risks - The company has a remaining liability of $154.6 million from the transition tax related to the deemed repatriation of foreign earnings, with$68.7 million recorded in current income tax liabilities and $85.9 million in non-current income tax liabilities as of December 31, 2024 [217]. - Total liabilities for litigation matters were estimated at$156.4 million as of December 31, 2024, with potential for additional charges upon resolution of uncertainties [218]. - The company has entered into contractual arrangements that may result in future payments ranging from $0 to$325 million, dependent on product R&D milestones and sales [221]. - The company had net assets in legal entities with non-U.S. Dollar functional currencies amounting to $1,950.5 million as of December 31, 2024 [238]. - The majority of the company's debt is fixed-rate, and a 10 percent change in interest rates would not have a material effect on interest expense, net [244]. - The company is exposed to credit risk primarily through cash and cash equivalents, derivative instruments, and accounts receivable, but believes reserves for losses are adequate [246]. - The company performs sensitivity analyses related to potential commodity price changes as part of its risk management program [241].