2003 FORM 10-K ZIMMER HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Earnings For the Years Ended December 31, 2003 2002 2001 Net Sales $1,901.0 $1,372.4 $1,178.6 Cost of products sold 516.2 344.8 321.6 Gross Profit 1,384.8 1,027.6 857.0 Research and development 105.8 80.7 71.6 Selling, general and administrative 737.5 546.0 537.1 In-process research and development 11.2 – – Acquisition and integration 79.6 – – Operating expenses 934.1 626.7 608.7 Operating Profit 450.7 400.9 248.3 Interest expense 13.2 12.0 7.4 Earnings before income taxes, cumulative effect of change in accounting principle and minority interest 437.5 388.9 240.9 Provision for income taxes 146.8 131.1 91.1 Minority interest 0.5 – – Earnings before cumulative effect of change in accounting principle 291.2 257.8 149.8 Cumulative effect of change in accounting principle, net of tax 55.1 – – Net Earnings $ 346.3 $ 257.8 $ 149.8 Earnings Per Common Share – Basic Earnings before cumulative effect of change in accounting principle $ 1.40 $ 1.33 $ 0.77 Cumulative effect of change in accounting principle, net of tax 0.27 – – Earnings Per Common Share – Basic $ 1.67 $ 1.33 $ 0.77 Earnings Per Common Share – Diluted Earnings before cumulative effect of change in accounting principle $ 1.38 $ 1.31 $ 0.77 Cumulative effect of change in accounting principle, net of tax 0.26 – – Earnings Per Common Share – Diluted $ 1.64 $ 1.31 $ 0.77 Pro Forma Amounts Assuming the New Accounting Principle is Applied Retroactively Net Earnings $ 291.2 $ 260.8 $ 156.2 Earnings Per Common Share – Basic $ 1.40 $ 1.34 $ 0.81 Earnings Per Common Share – Diluted $ 1.38 $ 1.33 $ 0.80 Weighted Average Common Shares Outstanding Basic 207.7 194.5 193.7 Diluted 211.2 196.8 194.3 (in millions, except per share amounts) The accompanying notes are an integral part of these consolidated financial statements. 35