2003 FORM 10-K ZIMMER HOLDINGS, INC. AND SUBSIDIARIES 11. DEBT  Senior Credit Facility Uncommitted Credit Facilities In connection with the Exchange Offers, the Company entered into the following committed financing arrangements: (i) $400 million 364-day revolving credit facility, (ii) $800 million three-year revolving credit facility and (iii) $550 million five-year term loan facility, (collectively, the ‘‘Senior Credit Facility’’). The Company’s Senior Credit Facility was used to fund the cash portion of the Exchange Offers, refinance the existing debt of both the Company and Centerpulse and pay certain closing costs. Effective as of the Closing Date, the Company terminated its $600 million committed, multi-currency revolving senior credit facility (the ‘‘Terminated Facility’’). Debt issuance costs of $19.9 million were incurred to obtain the Senior Credit Facility arrangement. These costs were capitalized and are amortized to earnings on a straight- line basis over the lives of the related facilities. At December 31, 2003, unamortized debt issuance costs were $16.8 million. Upon maturity of the Senior Credit Facility’s $400 million 364-day revolving credit facility in June 2004, the Company is permitted to convert the outstanding balance to a term loan repayable in a single payment due in June 2005. The lenders’ commitments under the Senior Credit Facility’s $800 million three-year revolving credit facility expire in June 2006. The Senior Credit Facility’s $550 million five-year term loan facility amortizes in quarterly installments beginning in September 2005. There is no prepayment penalty included in the Senior Credit Facility. The $800 million three-year revolving credit facility has a multi-currency option of up to an aggregate principal amount of $350 million. The Company and certain of its wholly owned foreign and domestic subsidiaries are the borrowers and its wholly owned domestic subsidiaries are the guarantors of the Senior Credit Facility. Borrowings may bear interest at the appropriate LIBOR-based rate, or an alternative base rate, plus an applicable margin determined by reference to the Company’s senior unsecured long-term credit rating and the amounts drawn under the Senior Credit Facility. The Senior Credit Facility contains customary affirmative and negative covenants and events of default for an unsecured financing arrangement. Financial covenants include a maximum leverage ratio and a minimum interest coverage ratio. The Company was in compliance with all covenants under the Senior Credit Facility as of December 31, 2003. Commitments under the $400 million 364-day revolving credit facility and the $800 million three-year revolving credit facility are subject to certain fees, including a facility and a utilization fee. As of December 31, 2003, the Company had $1,102.4 million in outstanding borrowings under the Senior Credit Facility. As of December 31, 2003, the Senior Credit Facility borrowings were comprised of $1,000.0 million in U.S. dollar based borrowings with a weighted average interest rate of 2.26 percent (3.42 percent as of December 31, 2002 under the Terminated Facility) and the equivalent of $102.4 million in Japanese Yen based borrowings with a weighted average interest rate of 0.84 percent (0.93 percent as of December 31, 2002 under the Terminated Facility). The Company has a $15 million uncommitted unsecured revolving line of credit. The purpose of this credit line is to support the working capital needs, letters of credit and overdraft needs for the Company. The uncommitted credit agreement contains customary affirmative and negative covenants and events of default, none of which are considered restrictive to the operation of the business. In addition, this uncommitted credit agreement provides for unconditional and irrevocable guarantees by the Company. In the event the Company’s long-term debt ratings by both Standard and Poor’s Ratings Services and Moody’s Investor’s Service, Inc., fall below BB– and Ba3, then the Company may be required to repay all outstanding and contingent obligations. The Company’s credit rating as of December 31, 2003 met such requirement. This uncommitted credit line matures on August 1, 2004. Outstanding borrowings under this uncommitted line of credit as of December 31, 2003 and 2002 were $0.6 million and zero, respectively. The Company has an additional $20 million uncommitted unsecured revolving line of credit. The purpose of this credit line is to support short-term working capital needs of the Company. The agreement for this uncommitted unsecured line of credit contains customary covenants, none of which are considered restrictive to the operation of the business. This uncommitted line matures on July 28, 2004. There were no borrowings under this uncommitted line of credit as of December 31, 2003 or 2002. The Company was in compliance with all covenants under both uncommitted credit facilities as of December 31, 2003. Outstanding debt as of December 31, 2003 and 2002, consists of the following (in millions): 2003 2002 Senior Credit Facility 364-day revolving credit facility $ 100.0 $ – Three-year multi-currency revolving credit facility 552.4 – Five-year term loan 450.0 – Terminated Facility – 156.2 Uncommitted credit facilities 0.6 – Capital leases and other 6.1 0.5 Total debt 1,109.1 156.7 Less: Current Portion 101.3 156.7 Total Long-Term Debt $1,007.8 $ – 46 Notes to Consolidated Financial Statements (Continued)