2003 FORM 10-K ZIMMER HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements  (Continued) The components of net pension expense for the years ended December 31 for the Company’s defined benefit retirement plans subsequent to the Distribution are as follows (in millions): U.S. and Puerto Rico Non-U.S. 2003 2002 2001 2003 2002 2001 Service cost $ 8.6 $ 7.2 $ 2.3 $ 6.8 $ 2.0 $ 1.4 Interest cost 3.1 2.0 0.7 2.0 0.7 0.5 Expected return on plan assets (2.8) (1.2) – (2.2) (1.0) (0.5) Amortization of prior service cost (0.2) 0.1 – – – – Amortization of unrecognized actuarial (gain) loss 0.5 0.1 – 0.4 0.2 (0.1) Net periodic benefit cost $ 9.2 $ 8.2 $ 3.0 $ 7.0 $ 1.9 $ 1.3 The weighted average actuarial assumptions used in accounting for the Company’s defined benefit retirement plans were as follows: U.S. and Puerto Rico Non-U.S. 2003 2002 2001 2003 2002 2001 Discount rate – net periodic benefit cost 7.00% 7.25% 7.25% 4.08% 4.25% 3.64% Discount rate – benefit obligation 6.75 7.00 7.25 4.03 4.17 3.64 Rate of compensation increase 3.62 3.60 3.50 2.27 3.17 2.92 Expected long-term return on plan assets 9.00 9.00 9.00 4.77 5.95 5.68 The expected long-term rate of return on plan assets for the U.S. and Puerto Rico defined benefit retirement plans is based on the period expected benefits will be paid and the historical rates of return on the different asset classes held in the plans. The Company believes that historical asset results approximate expected market returns applicable to the funding of a long- term benefit obligation. 48