Suketu Upadhyay
Executive Vice President and Chief Financial Officer at Zimmer Biomet
Thanks, Bryan, and good morning, everyone. I'm going to briefly discuss our Q3 results and updates that we made to our full year 2021 financial guidance. Moving forward, unless otherwise noted, my statements will be about Q3 '21 and how it compares to the same period in 2020, and my revenue and P&L commentary will be on a constant currency or adjusted basis. We've also provided comparisons to the third quarter of 2019 as we feel that performance to pre-pandemic results is an important comparator.
Net sales in the third quarter were $1.924 billion, a reported decrease of 0.3% and a decrease of 0.8% on a constant currency basis. When compared to 2019, net sales increased 0.4%. On a consolidated basis, as Bryan mentioned, we were growing through August, but then declined in September as we saw delta variant cases and staffing shortage increases. In short, there was a seasonal step-up in procedure volumes for the quarter, but the recovery has not taken hold as fast as we thought it would, especially in our hip and knee businesses.
The Americas declined 3.2% or flat versus 2019. The U.S. declined 4.4% or up 0.1% versus 2019. Lower U.S. performance in September was the key driver to lower consolidated results. EMEA grew 5.9% or up 0.3% versus 2019. This is the first time the region posted positive growth since the start of the pandemic. In the quarter, we saw an improving trend across a number of markets. However, the U.K., France, Spain and most emerging markets continue to be challenged despite higher vaccination rates.
Lastly, Asia Pacific grew 0.5% or up 1.5% versus 2019. While we did see growth versus 2019, it decelerated versus what we observed in the first half of the year. This was driven in part by pricing adjustments on channel inventory as we continue to negotiate with our distributor partners ahead of VBP implementation. In tandem with continuing COVID pressure throughout the region, especially in Japan and Australia and New Zealand. Turning to business performance in the third quarter.
The global knee business declined 0.7% or down 1% versus 2019. In the U.S., knee is declined 5.3% or down 0.7% versus '19. Our global hip business declined 6.6% or down 2.4% versus 2019. In the U.S., hips declined 11.3% or down 2.4% versus '19. The sports extremity and trauma category increased 4.2% or 7.7% versus '19, driven by continuing commercial specialization, new product introductions and the contribution from strategic acquisitions we added to this portfolio in 2020.
Our dental and spine category declined 6.1% or down 2% versus 2019. The dental business posted good growth in the quarter and continued to benefit from strong execution and market recovery, while the spine business declined when compared to 2020 and 2019 due to increasing COVID pressure throughout the quarter. Finally, our other category grew 15.4% or down 1.1% versus 2019. Inside this category, we saw ongoing demand for ROSA Knee as well as increased revenues from the launch of our ROSA partial knee and hip applications.
Moving to the P&L. For the quarter, we reported GAAP diluted earnings per share of $0.69, lower than our GAAP diluted earnings per share of $1.16 in the third quarter of 2020. This decrease was driven primarily by cost of goods and higher spending related to litigation, our spin-off and R&D. In addition, our share count was up versus the prior year. On an adjusted basis, diluted earnings per share of $1.81 was flat compared to the prior year, even though sales were down.
We implemented targeted reductions in SG&A, which in tandem with a slightly lower tax rate helped offset higher investments in R&D and a higher share count. Adjusted gross margin of 70.3% was just below the prior year, and the results were slightly below our expectations due to lower volumes in tandem with less favorable product and geographic mix. Our adjusted operating expenses of $852 million were in line with the prior year and stepped down sequentially versus the second quarter.
Inside of that, we continue to ramp up investment in R&D and commercial infrastructure across priority growth areas like S.E.T., robotics and data and informatics. And we are offsetting those increases with improvements in efficiency across other areas of SG&A. Our adjusted operating margin for the quarter was 26.1%, largely in line with the prior year and prior quarter. The adjusted tax rate of 15.8% in the quarter was in line with our expectations.
Turning to cash and liquidity. We had operating cash flows of $433 million and free cash flow totaled $307 million with an ending cash and cash equivalents balance of just over $900 million. We continue to make good progress on deleveraging the balance sheet and pay down another $300 million of debt totaling $500 million of debt paydown for 2021 to date. Moving to our financial guidance. We've updated our full year 2021 outlook based on two factors: first, COVID and customer staffing pressures continuing at levels higher than previously expected.
And while we expect procedure volumes to seasonally improve in the fourth quarter, we are taking a cautious approach and currently assuming that the more acute pressure we saw in September will continue through the fourth quarter. And second, as Bryan mentioned, we now know more about the dynamics leading up to the implementation of the China VBP and project that it will have a bigger impact in the fourth quarter than originally assumed.
The impact across inventory reductions, price write-downs on existing inventory and a new factor, which is patients deferring their procedures have increased the impact of VBP and the timing of that impact. As a result, our current projection for Q4 VBP impact is about 300 basis points of headwind to our consolidated results, but the situation remains fluid, and we will continue to update you as the implementation of VBP unfolds. For the full year, we now expect reported revenue growth to be 11.3% to 12.5% versus 2020 with an FX impact of about 140 basis points of tailwind for the year.
While we are taking steps to further reduce spending in the fourth quarter as a response to our lower revenue outlook, we are reducing our adjusted operating margin projections to be 26% to 26.5% for the full year. Our updated full year adjusted diluted earnings per share guidance is now in the range of $7.32 to $7.47. Our adjusted tax rate projection is unchanged at 16% to 16.5%. And finally, our free cash flow estimates remain in the range of $900 million to $1.1 billion.
This updated full year 2021 guidance range implies that Q4 constant currency revenue growth will be between negative 2.3% and positive 1.8% versus Q4 2020. And we project Q4 adjusted earnings per share to be between $1.90 to $2.05. We kept a wider range of potential Q4 outcomes in our guidance to account for the uncertainty around COVID surges, customer staffing pressure and VBP implementation. As a note, we do believe that COVID pressure, including the related staffing shortages will continue to mute pandemic recovery as we move into 2022.
Additionally, as we mentioned earlier, VBP is expected to reduce 2022 consolidated revenues by about 100 basis points. That impact will be felt in our large joint segment and will negatively impact gross margins as we move forward. To respond to this, we are accelerating transformation and efficiency efforts to help offset these headwinds. In summary, the macro environment presents challenges, but our underlying business fundamentals remain strong as we continue to execute successfully against what we can control.
With that, I'll turn the call back over to Bryan.
