LETTER TO SHAREHOLDERS (cont.) We are happy to inform you that Zimmer’s outstanding financial performance has not gone unnoticed. Investor support resulted in the share price of Zimmer common stock increasing nearly 70% during the year. In June 2003,  Business Week Magazine featured Zimmer as  the top orthopaedic “Hot Growth Company” and ranked  us as the #26 Hot Growth Company overall.  MONEY Magazine included Zimmer among its 20 “Next Generation” Blue Chip stocks — “companies that have  a great shot at becoming tomorrow’s blue chips.” More recently,  Forbes Magazine noted Zimmer among the  “Best Managed Companies in America” and ranked  total shareholder return at 21st among the 1,000  companies that qualified for the ranking.  Since we began our growth drive in 1998, and through our spin-off and early life as a public company, we have pursued a very simple set of strategic priorities — new geographies ,  new products , and  new markets . To achieve these objectives we have employed four tactics: By the end of 2003, Zimmer was a much different com- pany than the Zimmer of early 1998, and our strategies needed a refinement based on our new stature. Innovation and Education This strategy is most evident in  our industry-leading program for  Minimally Invasive Solutions ( MIS ) Procedures and Technologies. As you know, we want patients to “Live Life Big.” In this report you’ll find an overview of our progress with MIS techniques together with our Zimmer Institute surgeon education program. Our strategy is obvious in our commitment to surgeons:  Confidence in your hands. TM It would be hard to top the 2003 accomplishments that transformed Zimmer and the orthopaedic industry. In 2004, we will be a bigger company with a bigger sales force, a bigger product portfolio, a bigger market presence, and a bigger manufacturing and distribution footprint.  In this case, bigger is better. I would like Zimmer share- holders to know how flawlessly your Zimmer employees have performed through the acquisition and integration, executing on our strategic plan to drive outstanding results in our base business while accomplishing all of the acquisition-related activities. “Thank you” to all Zimmer employees, both those from the old Zimmer and our  new employees from Centerpulse. We have over 6,500 employees focused on making 2004 an even greater year for you, our shareholders by doing what Zimmer does best — enabling orthopaedic surgeons to help their patients live life Even Bigger! Integration More than 100 full-time team members will continue to execute on over 275 discrete integration  projects with the goal of maximizing both the strategic potential of “The Perfect Fit” and the available synergies. With most of our combined organization and sales forces now defined, we will focus on training and cross-selling  in order to expand our strengthened market positions  and to harness the power of our combined research and product development resources. We also plan to close  the Implex acquisition in April 2004 and begin the  integration process immediately. Investment and Expansion We will maintain our strategy  of investing in R&D at the top of the orthopaedic industry with a target rate of 6% of sales. Key investments will be made in expanding Zimmer Spine, both on its exist- ing base and with the addition of  Trabecular Metal Technology products, and in expanding the efforts  of Zimmer Orthobiologics to create breakthrough orthopaedic treatments. 2004 — EVEN BIGGER? REFINED STRATEGIES FOR AN EVEN BIGGER IMPACT OUR STRATEGIC FOCUS FOR THE FUTURE Ray Elliott Chairman, President and Chief Executive Officer January 31, 2004 1) Rapid  commercialization of well-targeted new  products and services;  2) Accelerated internal  innovation based on market- leading levels of investment in Research & Development;  3) Acquisition of products, technologies, and compa- nies, particularly those that would strengthen our business in Europe and provide a platform in the spinal segment; and  4) Flawless, measurable  execution . 2