ZIMMER HOLDINGS, INC. AND SUBSIDIARIES 2003 FORM 10-K Consolidated Statements of Stockholders’ Equity (in millions) Accumulated Net Other Investment Total Common Shares Paid-in Retained Comprehensive by Former Stockholders’ Number Amount Capital Earnings Income Parent Equity Balance January 1, 2001 – $ – $ – $ – $ 7.0 $ 254.0 $ 261.0 Net earnings – – – 69.7 – 80.1 149.8 Foreign currency translation – – – – 2.6 – 2.6 Unrealized foreign currency hedge gains, net of tax – – – – 12.1 – 12.1 Reclassification adjustment – – – – (4.9) – (4.9) Comprehensive income – – – – – – 159.6 Net cash transferred to former parent – – – – – (56.3) (56.3) Dividend to former parent – – – – – (290.0) (290.0) Issuance of common stock 193.6 1.9 – – – (1.9) — Reclassification of remaining net investment by former parent – – – (14.1) – 14.1 — Exercise of stock options and issuance of restricted stock 0.3 – 4.4 – – – 4.4 Balance December 31, 2001 193.9 1.9 4.4 55.6 16.8 – 78.7 Net earnings – – – 257.8 – – 257.8 Foreign currency translation – – – – 13.5 – 13.5 Unrealized foreign currency hedge losses, net of tax – – – – (12.2) – (12.2) Reclassification adjustment – – – – (3.5) – (3.5) Minimum pension liability, net of tax – – – – (0.6) – (0.6) Comprehensive income – – – – – – 255.0 Exercise of stock options and issuance of restricted stock 1.3 0.1 32.5 – – – 32.6 Balance December 31, 2002 195.2 2.0 36.9 313.4 14.0 – 366.3 Net earnings – – – 346.3 – – 346.3 Foreign currency translation – – – – 156.6 – 156.6 Unrealized foreign currency hedge losses, net of tax – – – – (35.3) – (35.3) Reclassification adjustment – – – – 3.4 – 3.4 Comprehensive income – – – – – – 471.0 Centerpulse and InCentive Exchange Offers net of $(11.8) million equity issuance costs 44.5 0.4 2,211.6 – – – 2,212.0 Exercise of stock options and issuance of restricted stock 2.7 – 94.0 – – – 94.0 Balance December 31, 2003 242.4 $2.4 $2,342.5 $659.7 $138.7 $ – $3,143.3 The accompanying notes are an integral part of these consolidated financial statements. 37