2003 FORM 10-K ZIMMER HOLDINGS, INC. AND SUBSIDIARIES 22 value in the U.S. Patent and Trademark Office recognizing that the Company has developed something sufficiently unique to deserve a patent. The following table presents the components of the year- over-year percentage changes in net sales by geographic segment: Taper stem, which is often used in  MIS  hip replacement procedures;  Trabecular Metal  acetabular cups; and increased sales of  Trilogy  Acetabular System cups incorporating Longevity  Highly Crosslinked Polyethylene Liners. Net sales in Europe for the year ended December 31, 2003 increased 115 percent to $366.0 million. Sales growth was driven by additional sales from the Centerpulse acquisition and strong demand for the Company’s reconstructive implants. The 115 percent increase was comprised of a 77 percent increase due to the Centerpulse acquisition and a 38 percent increase in Zimmer standalone sales. Net sales of reconstructive implants increased 119 percent to $329.8 million, 81 percent due to the Centerpulse acquisition and 38 percent due to increased Zimmer standalone sales (increased 20 percent constant currency). Constant currency as used herein refers to sales growth measurements computed by eliminating the effect of changes in foreign exchange rates between periods. Knee sales increased 72 percent to $162.8 million, 37 percent due to the Centerpulse acquisition and 35 percent due to increased Zimmer standalone sales (increased 17 percent constant currency). Hip sales increased 196 percent to $151.7 million, 152 percent due to the Centerpulse acquisition and 44 percent due to increased Zimmer standalone sales (increased 27 percent constant currency). Knee sales were driven by strong sales of the  NexGen Legacy s ystem of knee prostheses, the  NexGen  CR Knee,  NexGen Trabecular Metal components and the  NexGen  Rotating Hinge Knee. Hip sales were driven by strong sales of  Trilogy  Acetabular System cups incorporating  Longevity  Highly Crosslinked Polyethylene Liners,  VerSys  porous stems and  Trabecular Metal  technology cups. Net sales for the year ended December 31, 2003 increased 39 percent to $1,901.0 million. Sales growth was driven by strong demand for the Company’s reconstructive implants and additional sales from the October 2, 2003 Centerpulse acquisition. The 39 percent increase was comprised of a 20 percent increase in Zimmer standalone sales and a 19 percent increase due to the Centerpulse acquisition. ‘‘Zimmer standalone sales’’ as used herein refers to sales for the period less sales from acquired Centerpulse businesses. Favorable demographics, including an aging population and a continued shift to premium priced products, contributed to the favorable volume and mix growth. Higher average selling prices were realized in all three geographic segments. The continued weakening of the U.S. dollar versus the Euro and the Japanese yen were the main contributors to the favorable impact of foreign currency exchange rates on net sales. Net sales in Asia Pacific for the year ended December 31, 2003 increased 21 percent to $326.7 million. Sales growth was driven by strong demand for the Company’s reconstructive implants and additional sales from the Centerpulse acquisition. The 21 percent increase was comprised of a 14 percent increase in Zimmer standalone sales and a 7 percent increase due to the Centerpulse acquisition. Net sales of reconstructive implants increased 25 percent to $249.8 million, 14 percent due to increased Zimmer standalone sales (increased 5 percent constant currency) and 11 percent due to the Centerpulse acquisition. Knee sales increased 21 percent to $114.2 million, 16 percent due to increased Zimmer standalone sales (increased 6 percent constant currency) and 5 percent due to the Centerpulse acquisition. Hip sales increased 25 percent to $128.2 million, 13 percent due to increased Zimmer standalone sales (increased 4 percent constant currency) and 12 percent due to the Centerpulse acquisition. Knee sales were driven by the  NexGen  LPS-Flex Knee,  NexGen Trabecular Metal  Technology tibial components and the NexGen  CR Knee. Hip sales were driven primarily by the continued conversion to porous stems and sales of  Trilogy Acetabular System cups incorporating  Longevity  Highly Crosslinked Polyethylene Liners. Net sales in the Americas for the year ended December 31, 2003 increased 30 percent to $1,208.3 million. Sales growth was driven by strong demand for the Company’s reconstructive implants and additional sales from the Centerpulse acquisition. The 30 percent increase was comprised of a 19 percent increase in Zimmer standalone sales plus an 11 percent increase due to the Centerpulse acquisition. Net sales of reconstructive implants increased 33 percent to $941.4 million, 22 percent due to increased Zimmer standalone sales and 11 percent related to the Centerpulse acquisition. Knee sales increased 32 percent to $523.6 million, 24 percent related to increased Zimmer standalone sales and 8 percent due to the Centerpulse acquisition. Hip sales increased 27 percent to $365.6 million, 21 percent due to increased Zimmer standalone sales and 6 percent due to the Centerpulse acquisition. Knee sales growth was led by the  NexGen Legacy  Knee-Posterior Stabilized product line, including the LPS-Flex Knee, the  NexGen Trabecular Metal  Technology tibial components, the  NexGen  CR Knee with  Prolong  Crosslinked Polyethylene and the  NexGen  Rotating Hinge Knee. Hip sales growth was driven by the continued conversion to porous stems including significant growth of the  VerSys  Hip System Fiber Metal RESULTS OF OPERATIONS Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 Zimmer Standalone Impact of Volume/ Foreign Sub- Centerpulse Net Mix Price Exchange Total Acquisition Change Americas 15% 4% –% 19% 11% 30% Europe 19 2 17 38 77 115 Asia Pacific 4 1 9 14 7 21 Consolidated 13 3 4 20 19 39