UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2023~~March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-13149

STRYKER CORPORATION
(Exact name of registrant as specified in its charter)

Michigan

38-1239739

(State of incorporation)

(I.R.S. Employer Identification No.)

~~2825 Airview Boulevard~~1941 Stryker Way

~~Kalamazoo,~~Portage,

Michigan

49002

(Address of principal executive offices)

(Zip Code)

(269)

385-2600

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.10 Par Value	SYK	New York Stock Exchange
~~1.125% Notes due 2023~~	~~SYK23~~	~~New York Stock Exchange~~
0.250% Notes due 2024	SYK24A	New York Stock Exchange
2.125% Notes due 2027	SYK27	New York Stock Exchange
3.375% Notes due 2028	SYK28	New York Stock Exchange
0.750% Notes due 2029	SYK29	New York Stock Exchange
2.625% Notes due 2030	SYK30	New York Stock Exchange
1.000% Notes due 2031	SYK31	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Emerging growth company

☐

Non-accelerated filer

☐

Small reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were ~~379,894,650~~380,949,778 shares of Common Stock, $0.10 par value, on ~~September 30, 2023.~~March 31, 2024.


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

PART I – FINANCIAL INFORMATION


ITEM 1.			FINANCIAL STATEMENTS

Stryker Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)


		Three Months				Nine Months
		2023		2022		2023		2022
		Three Months
		Three Months
		Three Months
		2024
		2024
		2024
Net sales
Net sales
Net sales	Net sales	$	4,909	$	4,479	$	14,683	$	13,247
Cost of sales	Cost of sales	1,751		1,697		5,328		4,905
Cost of sales
Cost of sales
Gross profit
Gross profit
Gross profit	Gross profit	$	3,158	$	2,782	$	9,355	$	8,342
Research, development and engineering expenses	Research, development and engineering expenses	353		364		1,038		1,128
Research, development and engineering expenses
Research, development and engineering expenses
Selling, general and administrative expenses	Selling, general and administrative expenses	1,701		1,455		5,188		4,704
Recall charges, net		9		(4)		12		14
Selling, general and administrative expenses
Selling, general and administrative expenses

Amortization of intangible assets

Amortization of intangible assets

Amortization of intangible assets	Amortization of intangible assets	164		159		486		469

Total operating expenses	Total operating expenses	$	2,227	$	1,974	$	6,724	$	6,315

Total operating expenses

Total operating expenses
Operating income
Operating income
Operating income	Operating income	$	931	$	808	$	2,631	$	2,027
Other income (expense), net	Other income (expense), net	(62)		8		(184)		(105)
Other income (expense), net
Other income (expense), net
Earnings before income taxes
Earnings before income taxes
Earnings before income taxes	Earnings before income taxes	$	869	$	816	$	2,447	$	1,922
Income taxes	Income taxes	177		—		425		127
Income taxes
Income taxes
Net earnings
Net earnings
Net earnings	Net earnings	$	692	$	816	$	2,022	$	1,795

Net earnings per share of common stock:	Net earnings per share of common stock:

Net earnings per share of common stock:

Net earnings per share of common stock:
Basic	Basic	$	1.82	$	2.16	$	5.33	$	4.75
Basic
Basic
Diluted
Diluted
Diluted	Diluted	$	1.80	$	2.14	$	5.27	$	4.70

Weighted-average shares outstanding (in millions):	Weighted-average shares outstanding (in millions):

Weighted-average shares outstanding (in millions):

Weighted-average shares outstanding (in millions):
Basic
Basic
Basic	Basic	379.8		378.4		379.5		378.1
Effect of dilutive employee stock compensation	Effect of dilutive employee stock compensation	4.2		3.4		4.2		4.1
Effect of dilutive employee stock compensation
Effect of dilutive employee stock compensation
Diluted
Diluted
Diluted	Diluted	384.0		381.8		383.7		382.2

Cash dividends declared per share of common stock	Cash dividends declared per share of common stock	$	0.75	$	0.695	$	2.25	$	2.085

Cash dividends declared per share of common stock

Cash dividends declared per share of common stock

Anti-dilutive shares excluded from the calculation of dilutive employee stock options were ~~5.0 for the three months 2022 and 4.2 for the nine months 2022 and~~ de minimis in all ~~other~~ periods.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)


		Three Months				Nine Months
		2023		2022		2023		2022
		Three Months
		Three Months
		Three Months
		2024
		2024
		2024
Net earnings
Net earnings
Net earnings	Net earnings	$	692	$	816	$	2,022	$	1,795
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss), net of tax:
Marketable securities
Marketable securities
Marketable securities	Marketable securities	—		—		—		(1)
Pension plans	Pension plans	(1)		10		(4)		17
Pension plans
Pension plans
Unrealized gains (losses) on designated hedges
Unrealized gains (losses) on designated hedges
Unrealized gains (losses) on designated hedges	Unrealized gains (losses) on designated hedges	2		8		4		33
Financial statement translation	Financial statement translation	80		179		(28)		393
Financial statement translation
Financial statement translation
Total other comprehensive income (loss), net of tax
Total other comprehensive income (loss), net of tax
Total other comprehensive income (loss), net of tax	Total other comprehensive income (loss), net of tax	$	81	$	197	$	(28)	$	442
Comprehensive income	Comprehensive income	$	773	$	1,013	$	1,994	$	2,237
Comprehensive income
Comprehensive income

See accompanying notes to Consolidated Financial Statements.


Dollar amounts are in millions except per share amounts or as otherwise specified.			1


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

CONSOLIDATED BALANCE SHEETS


		September 30		December 31
		2023		2022
		(Unaudited)
	March 31					March 31	December 31
	2024					2024	2023
	(Unaudited)
Assets
Assets
Assets	Assets
Current assets	Current assets
Current assets
Current assets
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	1,860	$	1,844
Marketable securities	Marketable securities	76		84
Accounts receivable, less allowance of $187 ($154 in 2022)		3,276		3,565
Accounts receivable, less allowance of $175 ($182 in 2023)
Inventories:	Inventories:
Materials and supplies
Materials and supplies
Materials and supplies	Materials and supplies	1,299		1,006
Work in process	Work in process	342		348
Finished goods	Finished goods	3,242		2,641
Total inventories	Total inventories	$	4,883	$	3,995
Prepaid expenses and other current assets	Prepaid expenses and other current assets	950		787
Total current assets	Total current assets	$	11,045	$	10,275
Property, plant and equipment:	Property, plant and equipment:
Land, buildings and improvements
Land, buildings and improvements
Land, buildings and improvements	Land, buildings and improvements	1,650		1,739
Machinery and equipment	Machinery and equipment	4,505		4,066
Total property, plant and equipment	Total property, plant and equipment	$	6,155	$	5,805
Less allowance for depreciation	Less allowance for depreciation	3,049		2,835
Property, plant and equipment, net	Property, plant and equipment, net	$	3,106	$	2,970
Goodwill	Goodwill	15,138		14,880
Other intangibles, net	Other intangibles, net	4,731		4,885
Noncurrent deferred income tax assets	Noncurrent deferred income tax assets	1,406		1,410
Other noncurrent assets	Other noncurrent assets	2,616		2,464
Total assets	Total assets	$	38,042	$	36,884

Liabilities and shareholders' equity	Liabilities and shareholders' equity
Liabilities and shareholders' equity
Liabilities and shareholders' equity
Current liabilities	Current liabilities
Current liabilities
Current liabilities
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	1,296	$	1,413
Accrued compensation	Accrued compensation	1,223		1,149
Income taxes	Income taxes	407		292
Dividends payable	Dividends payable	285		284
Accrued product liabilities		224		230
Accrued expenses and other liabilities	Accrued expenses and other liabilities	1,715		1,744
Current maturities of debt	Current maturities of debt	2,308		1,191
Total current liabilities	Total current liabilities	$	7,458	$	6,303
Long-term debt, excluding current maturities	Long-term debt, excluding current maturities	10,382		11,857
Income taxes	Income taxes	465		641
Other noncurrent liabilities	Other noncurrent liabilities	1,832		1,467
Total liabilities	Total liabilities	$	20,137	$	20,268
Shareholders' equity	Shareholders' equity
Common stock, $0.10 par value	Common stock, $0.10 par value	38		38
Common stock, $0.10 par value
Common stock, $0.10 par value
Additional paid-in capital	Additional paid-in capital	2,183		2,034
Retained earnings	Retained earnings	15,933		14,765
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(249)		(221)
Total shareholders' equity	Total shareholders' equity	$	17,905	$	16,616
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	38,042	$	36,884

See accompanying notes to Consolidated Financial Statements.


Dollar amounts are in millions except per share amounts or as otherwise specified.			2


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)


		Three Months				Nine Months
		2023		2022		2023		2022
		Three Months
		Three Months
		Three Months
		2024
		2024
		2024
Common stock shares outstanding (in millions)
Common stock shares outstanding (in millions)
Common stock shares outstanding (in millions)	Common stock shares outstanding (in millions)
Beginning	Beginning	379.8		378.3		378.7		377.5
Beginning
Beginning
Issuance of common stock under stock compensation and benefit plans
Issuance of common stock under stock compensation and benefit plans
Issuance of common stock under stock compensation and benefit plans	Issuance of common stock under stock compensation and benefit plans	0.1		0.1		1.2		0.9

Ending	Ending	379.9		378.4		379.9		378.4

Ending

Ending

Common stock

Common stock

Common stock	Common stock
Beginning	Beginning	$	38	$	38	$	38	$	38
Beginning
Beginning
Issuance of common stock under stock compensation and benefit plans
Issuance of common stock under stock compensation and benefit plans
Issuance of common stock under stock compensation and benefit plans	Issuance of common stock under stock compensation and benefit plans	—		—		—		—

Ending	Ending	$	38	$	38	$	38	$	38

Ending

Ending
Additional paid-in capital
Additional paid-in capital
Additional paid-in capital	Additional paid-in capital
Beginning	Beginning	$	2,127	$	1,989	$	2,034	$	1,890
Beginning
Beginning
Issuance of common stock under stock compensation and benefit plans
Issuance of common stock under stock compensation and benefit plans
Issuance of common stock under stock compensation and benefit plans	Issuance of common stock under stock compensation and benefit plans	4		6		(16)		(2)

Share-based compensation	Share-based compensation	52		33		165		140

Share-based compensation

Share-based compensation
Ending
Ending
Ending	Ending	$	2,183	$	2,028	$	2,183	$	2,028
Retained earnings	Retained earnings
Retained earnings
Retained earnings
Beginning
Beginning
Beginning	Beginning	$	15,526	$	13,933	$	14,765	$	13,480

Net earnings	Net earnings	692		816		2,022		1,795

Net earnings

Net earnings

Cash dividends declared

Cash dividends declared

Cash dividends declared	Cash dividends declared	(285)		(263)		(854)		(789)
Ending	Ending	$	15,933	$	14,486	$	15,933	$	14,486
Ending
Ending
Accumulated other comprehensive income (loss)
Accumulated other comprehensive income (loss)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)
Beginning	Beginning	$	(330)	$	(286)	$	(221)	$	(531)
Beginning
Beginning
Other comprehensive income (loss)	Other comprehensive income (loss)	81		197		(28)		442
Other comprehensive income (loss)
Other comprehensive income (loss)
Ending
Ending
Ending	Ending	$	(249)	$	(89)	$	(249)	$	(89)

Total shareholders' equity	Total shareholders' equity	$	17,905	$	16,463	$	17,905	$	16,463

Total shareholders' equity

Total shareholders' equity

See accompanying notes to Consolidated Financial Statements.


Dollar amounts are in millions except per share amounts or as otherwise specified.			3


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


		Nine Months
		2023		2022
	Three Months						Three Months
	2024					2024		2023
Operating activities	Operating activities
Net earnings	Net earnings	$	2,022	$	1,795
Net earnings
Net earnings
Adjustments to reconcile net earnings to net cash provided by operating activities:	Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation
Depreciation
Depreciation	Depreciation	292		276
Amortization of intangible assets	Amortization of intangible assets	486		469
Asset impairments	Asset impairments	12		18
Share-based compensation	Share-based compensation	165		140
Recall charges, net		12		14
Sale of inventory stepped-up to fair value at acquisition		—		12
Deferred income tax (benefit) expense

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:

Changes in operating assets and liabilities:

Changes in operating assets and liabilities:
Accounts receivable
Accounts receivable
Accounts receivable	Accounts receivable	266		(186)
Inventories	Inventories	(922)		(754)
Accounts payable	Accounts payable	(118)		111
Accrued expenses and other liabilities	Accrued expenses and other liabilities	165		5
Recall-related payments		(28)		(26)

Income taxes
Income taxes
Income taxes	Income taxes	(69)		(262)
Other, net	Other, net	(100)		9
Net cash provided by operating activities	Net cash provided by operating activities	$	2,183	$	1,621
Investing activities	Investing activities
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(390)		(2,563)
Acquisitions, net of cash acquired
Acquisitions, net of cash acquired
Purchases of marketable securities	Purchases of marketable securities	(41)		(43)
Proceeds from sales of marketable securities	Proceeds from sales of marketable securities	49		40
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(430)		(400)
Proceeds from settlement of net investment hedges		—		197

Other investing, net
Other investing, net
Other investing, net	Other investing, net	2		7
Net cash used in investing activities	Net cash used in investing activities	$	(810)	$	(2,762)
Financing activities	Financing activities
Proceeds (payments) on short-term borrowings, net	Proceeds (payments) on short-term borrowings, net	540		(376)
Proceeds from issuance of long-term debt		—		1,500
Proceeds (payments) on short-term borrowings, net
Proceeds (payments) on short-term borrowings, net

Payments on long-term debt
Payments on long-term debt
Payments on long-term debt	Payments on long-term debt	(852)		(502)
Payments of dividends	Payments of dividends	(854)		(788)

Cash paid for taxes from withheld shares	Cash paid for taxes from withheld shares	(121)		(89)
Cash paid for taxes from withheld shares
Cash paid for taxes from withheld shares

Other financing, net
Other financing, net
Other financing, net	Other financing, net	(21)		(48)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	$	(1,308)	$	(303)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(49)		(80)
Change in cash and cash equivalents	Change in cash and cash equivalents	$	16	$	(1,524)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	1,844		2,944
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	1,860	$	1,420

See accompanying notes to Consolidated Financial Statements.


Dollar amounts are in millions except per share amounts or as otherwise specified.			4


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

General Information

Management believes the accompanying unaudited Consolidated Financial Statements contain all adjustments, including normal recurring items, considered necessary to fairly present the financial position of Stryker Corporation and its consolidated subsidiaries ("Stryker," the "Company," "we," "us" or "our") on ~~September 30, 2023~~March 31, 2024 and the results of operations for the three ~~and nine~~ months ~~2023.~~2024. The results of operations included in these Consolidated Financial Statements may not necessarily be indicative of our annual results. These statements should be read in conjunction with our Annual Report on Form 10-K for ~~2022. Certain immaterial reclassifications have been made to prior year's segment operating income to conform with current year presentation in our Consolidated Financial Statements.~~2023.

New Accounting Pronouncements Not Yet Adopted

~~We evaluate all Accounting Standards Updates (ASUs) issued by~~In December 2023 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09 (Topic 740): Income Taxes: Improvements to Income Tax Disclosures which expands the existing rules on income tax disclosures. This update requires entities to disclose specific categories in the tax rate reconciliation, provide additional information for reconciling items that meet a quantitative threshold and disclose additional information about income taxes paid on an annual basis. The new disclosure requirements are effective for fiscal years beginning after December 15, 2024 and we will adopt this ASU in 2025.

In November 2023 the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which expands disclosure requirements to require entities to disclose significant segment expenses that are regularly provided to or easily computed from information regularly provided to the chief operating decision maker. This update also requires all annual disclosures currently required by Topic 280 to be disclosed in interim periods. The new disclosure requirements are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We will adopt this ASU in the fourth quarter 2024.

We evaluate all ASUs issued by the FASB for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our Consolidated Financial Statements.

NOTE 2 - REVENUE RECOGNITION

Our policies for recognizing sales have not changed from those described in our Annual Report on Form 10-K for ~~2022.~~2023.

We disaggregate our net sales by business and geographic location for each of our segments as we believe it best depicts how the nature, amount, timing and certainty of our net sales and cash flows are affected by economic factors.

Beginning in the first quarter ~~2023 we consolidated Other MedSurg and Neurotechnology into Endoscopy as Other MedSurg and Neurotechnology (primarily Sustainability Solutions)~~2024, a product line previously included in Instruments has been ~~fully integrated into~~reclassified to Endoscopy to align with a change in our ~~Endoscopy business. Endoscopy includes sales related to Other of $84 and $72 for the three months 2023 and 2022 and $252 and $218 for the nine months 2023 and 2022.~~internal reporting structure. We have reflected ~~these changes~~this change in all historical periods presented.

Net Sales by Business
Three Months Nine Months
2023 2022 2023 2022
MedSurg and Neurotechnology:
Instruments $ 628 $ 535 $ 1,833 $ 1,626
Endoscopy 738 662 2,141 1,946
Medical 798 765 2,417 2,095
Neurovascular 311 294 906 901
Neuro Cranial 384 332 1,112 992
$ 2,859 $ 2,588 $ 8,409 $ 7,560
Orthopaedics and Spine:
Knees $ 515 $ 481 $ 1,643 $ 1,445
Hips 362 347 1,130 1,038
Trauma and Extremities 752 672 2,287 2,033
Spine 291 280 871 849
Other 130 111 343 322
$ 2,050 $ 1,891 $ 6,274 $ 5,687
Total $ 4,909 $ 4,479 $ 14,683 $ 13,247


Net Sales by Geography
		Three Months 2023				Three Months 2022
		United States		International		United States		International
Net Sales by Business
Net Sales by Business
Net Sales by Business
		Three Months
		Three Months
		Three Months
		2024
		2024
		2024
MedSurg and Neurotechnology:
MedSurg and Neurotechnology:
MedSurg and Neurotechnology:	MedSurg and Neurotechnology:
Instruments	Instruments	$	503	$	125	$	425	$	110
Instruments
Instruments
Endoscopy
Endoscopy
Endoscopy	Endoscopy	610		128		551		111
Medical	Medical	660		138		625		140
Medical
Medical
Neurovascular
Neurovascular
Neurovascular	Neurovascular	120		191		110		184
Neuro Cranial	Neuro Cranial	315		69		274		58
Neuro Cranial
Neuro Cranial
		$	2,208	$	651	$	1,985	$	603
		$

		$

		$
Orthopaedics and Spine:
Orthopaedics and Spine:
Orthopaedics and Spine:	Orthopaedics and Spine:
Knees	Knees	$	385	$	130	$	365	$	116
Knees
Knees
Hips
Hips
Hips	Hips	231		131		225		122
Trauma and Extremities	Trauma and Extremities	550		202		494		178
Trauma and Extremities
Trauma and Extremities
Spine
Spine
Spine	Spine	217		74		206		74
Other	Other	87		43		85		26
		$	1,470	$	580	$	1,375	$	516
Other
Other
		$
		$
		$
Total	Total	$	3,678	$	1,231	$	3,360	$	1,119
Total
Total


Net Sales by Geography	Net Sales by Geography
		Nine Months 2023				Nine Months 2022
		United States		International		United States		International
		Three Months 2024
		Three Months 2024
		Three Months 2024										Three Months 2023
	United States									United States	International		United States	International
MedSurg and Neurotechnology:	MedSurg and Neurotechnology:
Instruments
Instruments
Instruments	Instruments	$	1,465	$	368	$	1,290	$	336
Endoscopy	Endoscopy	1,742		399		1,585		361
Medical	Medical	1,954		463		1,686		409
Neurovascular	Neurovascular	361		545		333		568
Neuro Cranial	Neuro Cranial	910		202		819		173
		$	6,432	$	1,977	$	5,713	$	1,847
	$
Orthopaedics and Spine:	Orthopaedics and Spine:
Knees
Knees
Knees	Knees	$	1,207	$	436	$	1,078	$	367
Hips	Hips	716		414		657		381
Trauma and Extremities	Trauma and Extremities	1,663		624		1,470		563
Spine	Spine	650		221		615		234
Other	Other	233		110		243		79
		$	4,469	$	1,805	$	4,063	$	1,624
	$
Total	Total	$	10,901	$	3,782	$	9,776	$	3,471

We sell certain customer lease agreements and the related leased assets to third-party financial institutions to accelerate our cash collection cycle. The lease receivables are sold without recourse and are derecognized from our Consolidated Balance Sheets at the time of sale. Under the terms of our arrangements, we collect lease payments on behalf of the financial institutions but maintain no other form of continuing involvement. Sales of these lease agreements are classified as operating activities in our Consolidated Statements of Cash Flows. Fees earned for our servicing activities are immaterial. Revenue related to customer lease agreements sold under these arrangements represented approximately 3% of our total revenue for the three months 2024 and 2023.

Contract Assets and Liabilities

On ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 contract assets recorded in our Consolidated Balance Sheets were not significant.

Our contract liabilities arise as a result of consideration received from customers at inception of contracts for certain businesses or where the timing of billing for services precedes satisfaction of our performance obligations. This occurs primarily when payment is received upfront for certain multi-period extended service contracts. Our contract liabilities of ~~$788~~$866 and ~~$741~~$860 on ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 are classified within accrued


Dollar amounts are in millions except per share amounts or as otherwise specified.			5


STRYKER CORPORATION						2024 First Quarter Form 10-Q

expenses and other liabilities and other noncurrent liabilities within our Consolidated Balance Sheets based on the timing of when we expect to complete our performance obligations.


~~Dollar amounts are in millions except per share amounts or as otherwise specified.~~			5


~~STRYKER CORPORATION~~						~~2023 Third Quarter Form 10-Q~~

Changes in contract liabilities during the ~~nine~~three months ~~2023~~2024 were as follows:


	~~September 30~~March 31
	~~2023~~2024
Beginning contract liabilities	$	~~741~~860
Revenue recognized from beginning of year contract liabilities	~~(306)~~(153)

Net advance consideration received during the period	~~353~~159
Ending contract liabilities	$	~~788~~866

NOTE 3 - ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (AOCI)


Three Months 2023		Marketable Securities		Pension Plans		Hedges		Financial Statement Translation		Total
Three Months 2024												Three Months 2024	Marketable Securities	Pension Plans	Hedges	Financial Statement Translation	Total
Beginning	Beginning	$	(1)	$	28	$	54	$	(411)	$	(330)
OCI	OCI	1		(1)		11		133		144
Income taxes	Income taxes	—		1		(2)		(47)		(48)
Reclassifications to:	Reclassifications to:
Cost of sales	Cost of sales	—		—		(7)		—		(7)
Cost of sales
Cost of sales
Other (income) expense, net	Other (income) expense, net	(1)		(1)		(2)		(8)		(12)
Income taxes	Income taxes	—		—		2		2		4
Net OCI	Net OCI	—		(1)		2		80		81
Ending	Ending	$	(1)	$	27	$	56	$	(331)	$	(249)

Three Months 2022 Marketable Securities Pension Plans Hedges Financial Statement Translation Total
Beginning $ (1) $ (148) $ 65 $ (202) $ (286)
OCI — 11 19 304 334
Income taxes — (3) (1) (119) (123)
Reclassifications to:
Cost of sales — — (7) — (7)
Other (income) expense, net — 3 (2) (8) (7)
Income taxes — (1) (1) 2 —
Net OCI — 10 8 179 197
Ending $ (1) $ (138) $ 73 $ (23) $ (89)

Nine Months 2023 Marketable Securities Pension Plans Hedges Financial Statement Translation Total
Beginning $ (1) $ 31 $ 52 $ (303) $ (221)
OCI — 2 38 10 50
Income taxes — (4) (8) (19) (31)
Reclassifications to:
Cost of sales — — (29) — (29)
Other (income) expense, net — (3) (4) (25) (32)
Income taxes — 1 7 6 14
Net OCI — (4) 4 (28) (28)
Ending $ (1) $ 27 $ 56 $ (331) $ (249)


Nine Months 2022		Marketable Securities		Pension Plans		Hedges		Financial Statement Translation		Total
Three Months 2023												Three Months 2023	Marketable Securities	Pension Plans	Hedges	Financial Statement Translation	Total
Beginning	Beginning	$	—	$	(155)	$	40	$	(416)	$	(531)
OCI	OCI	(1)		15		55		658		727
Income taxes	Income taxes	—		(3)		(7)		(242)		(252)
Reclassifications to:	Reclassifications to:
Cost of sales	Cost of sales	—		—		(10)		—		(10)
Cost of sales
Cost of sales
Other (income) expense, net	Other (income) expense, net	—		7		(4)		(30)		(27)
Income taxes	Income taxes	—		(2)		(1)		7		4
Net OCI	Net OCI	(1)		17		33		393		442
Ending	Ending	$	(1)	$	(138)	$	73	$	(23)	$	(89)

NOTE 4 - DERIVATIVE INSTRUMENTS

We use operational and economic hedges, foreign currency exchange forward contracts, net investment hedges (both derivative and non-derivative financial instruments) and interest rate derivative instruments to manage the impact of currency exchange and interest rate fluctuations on earnings, cash flow and equity. We do not enter into derivative instruments for speculative purposes. We are exposed to potential credit loss in the event of nonperformance by counterparties on our outstanding derivative instruments but do not anticipate nonperformance by any of our counterparties. Should a counterparty default, our maximum loss exposure is the asset balance of the instrument. We have not changed our hedging strategies, accounting practices or objectives from those disclosed in our Annual Report on Form 10-K for ~~2022.~~2023.

Foreign Currency Hedges


September 2023		Cash Flow		Net Investment		Non-Designated		Total
March 2024										March 2024	Cash Flow	Net Investment	Non-Designated	Total
Gross notional amount	Gross notional amount	$	838	$	1,583	$	4,726	$	7,147
Maximum term in years	Maximum term in years							3.1		Maximum term in years					2.6
Fair value:	Fair value:
Other current assets
Other current assets
Other current assets	Other current assets	$	31	$	95	$	86	$	212
Other noncurrent assets	Other noncurrent assets	1		11		—		12
Other current liabilities	Other current liabilities	(8)		—		(6)		(14)
Other noncurrent liabilities	Other noncurrent liabilities	(1)		(12)		—		(13)
Total fair value	Total fair value	$	23	$	94	$	80	$	197


December 2022		Cash Flow		Net Investment		Non-Designated		Total
December 2023										December 2023	Cash Flow	Net Investment	Non-Designated	Total
Gross notional amount	Gross notional amount	$	1,053	$	1,598	$	3,417	$	6,068
Maximum term in years	Maximum term in years							3.9		Maximum term in years					2.9
Fair value:	Fair value:
Other current assets
Other current assets
Other current assets	Other current assets	$	20	$	—	$	9	$	29
Other noncurrent assets	Other noncurrent assets	1		89		—		90
Other current liabilities	Other current liabilities	(6)		—		(79)		(85)
Other noncurrent liabilities	Other noncurrent liabilities	(1)		(16)		—		(17)
Total fair value	Total fair value	$	14	$	73	$	(70)	$	17

We had €1.5 billion at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 in certain forward currency contracts designated as net investment hedges to hedge a portion of our investments in certain of our entities with functional currencies denominated in Euros. In addition to these derivative financial instruments designated as net investment hedges, we had €4.9 billion ~~and €4.4 billion~~ at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 of senior unsecured notes designated as net investment hedges to selectively hedge portions of our investment in certain international subsidiaries. The currency effects of our Euro-denominated senior unsecured notes are reflected in AOCI within shareholders' equity where they offset gains and losses recorded on our net investment in international subsidiaries.

The total after-tax gain (loss) recognized in OCI related to designated net investment hedges was ~~$42~~$122 in the ~~nine~~three months ~~2023.~~2024.

~~Net~~ Currency Exchange Rate Gains (Losses) Recognized in Net Earnings


Derivative			Three Months				Nine Months
instrument:		Recorded in:	2023		2022		2023		2022
			Three Months
			Three Months
			Three Months
Derivative Instrument
Derivative Instrument
Derivative Instrument
Cash Flow
Cash Flow
Cash Flow	Cash Flow	Cost of sales	$	7	$	7	$	29	$	10
Net Investment	Net Investment	Other income (expense), net	8		8		25		30
Net Investment
Net Investment
Non-Designated	Non-Designated	Other income (expense), net	4		(1)		13		2
		Total	$	19	$	14	$	67	$	42
Non-Designated
Non-Designated
		Total
		Total
		Total


~~Dollar amounts are in millions except per share amounts or as otherwise specified.~~			6


~~STRYKER CORPORATION~~						~~2023 Third Quarter Form 10-Q~~

Pretax gains (losses) on derivatives designated as cash flow hedges of ~~$35~~$26 and net investment hedges of ~~$31~~$24 recorded in AOCI are expected to be reclassified to cost of sales and other income (expense), net in earnings within 12 months of ~~September 30, 2023.~~March 31, 2024. This cash flow hedge reclassification is primarily due to the sale of inventory that includes previously hedged purchases. A component of the AOCI amounts related to net investment hedges is reclassified over the life of the hedge instruments as we elected to exclude the initial value of the component related to the spot-forward difference from the effectiveness assessment.

Interest Rate Hedges

Pretax gains of $5$4 recorded in AOCI related to ~~other~~ interest rate hedges closed in conjunction with debt issuances are expected to be reclassified to other income (expense), net in earnings within 12 months of ~~September 30, 2023.~~March 31, 2024. The cash flow effect of interest rate hedges is recorded in cash flow from operations.


Dollar amounts are in millions except per share amounts or as otherwise specified.			6


STRYKER CORPORATION						2024 First Quarter Form 10-Q

NOTE 5 - FAIR VALUE MEASUREMENTS

Our policies for managing risk related to foreign currency, interest rates, credit and markets and our process for determining fair value have not changed from those described in our Annual Report on Form 10-K for ~~2022.~~2023.

In the third quarter 2022 we determined that certain commercial and regulatory milestones related to technology acquired in the purchase of Mobius Imaging and Cardan Robotics were no longer probable of being achieved and recorded a $110 reduction in the fair value of contingent consideration reflected in selling, general and administrative expenses.

~~In the second quarter~~ 2023 we recorded $192 of contingent consideration related to the acquisition of Cerus Endovascular Limited (Cerus) described in Note 7.

There were no significant transfers into or out of any level of the fair value hierarchy in ~~2023.~~2024.


Assets Measured at Fair Value	Assets Measured at Fair Value	September		December		Assets Measured at Fair Value	March 31	December 31
		2023		2022			2024	2023
Cash and cash equivalents	Cash and cash equivalents	$	1,860	$	1,844
Trading marketable securities	Trading marketable securities	189		166
Level 1 - Assets	Level 1 - Assets	$	2,049	$	2,010
Available-for-sale marketable securities:	Available-for-sale marketable securities:
Corporate and asset-backed debt securities	Corporate and asset-backed debt securities	$	38	$	42
Foreign government debt securities		—		1
Corporate and asset-backed debt securities
Corporate and asset-backed debt securities

United States agency debt securities
United States agency debt securities
United States agency debt securities	United States agency debt securities	5		3
United States treasury debt securities	United States treasury debt securities	32		36

Certificates of deposit
Certificates of deposit
Certificates of deposit	Certificates of deposit	1		2
Total available-for-sale marketable securities	Total available-for-sale marketable securities	$	76	$	84
Foreign currency exchange forward contracts	Foreign currency exchange forward contracts	224		119

Level 2 - Assets	Level 2 - Assets	$	300	$	203
Level 2 - Assets
Level 2 - Assets
Total assets measured at fair value	Total assets measured at fair value	$	2,349	$	2,213


Liabilities Measured at Fair Value	Liabilities Measured at Fair Value	September		December		Liabilities Measured at Fair Value	March 31	December 31
		2023		2022			2024	2023
Deferred compensation arrangements	Deferred compensation arrangements	$	189	$	166
Level 1 - Liabilities	Level 1 - Liabilities	$	189	$	166
Foreign currency exchange forward contracts	Foreign currency exchange forward contracts	$	27	$	102

Level 2 - Liabilities	Level 2 - Liabilities	$	27	$	102
Level 2 - Liabilities
Level 2 - Liabilities
Contingent consideration:	Contingent consideration:
Beginning
Beginning
Beginning	Beginning	$	121	$	306
Additions	Additions	192		1
Change in estimate and foreign exchange	Change in estimate and foreign exchange	(8)		(137)
Settlements	Settlements	(22)		(49)
Ending	Ending	$	283	$	121
Level 3 - Liabilities	Level 3 - Liabilities	$	283	$	121
Total liabilities measured at fair value	Total liabilities measured at fair value	$	499	$	389

						Fair Value of Available for Sale Securities by Maturity
		September		December
		2023		2022
	March 31						March 31		December 31
						2024		2023
Due in one year or less	Due in one year or less	$	43	$	53
Due after one year through three years	Due after one year through three years	$	33	$	31

On ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 the aggregate difference between the cost and fair value of available-for-sale marketable securities was nominal. Interest income on cash and cash equivalents, short-term investments and marketable securities income was ~~$15~~$36 and ~~$26~~$13 in the three months 2024 and ~~$40 and $61 in the nine months~~ 2023, ~~and 2022,~~ which was recorded in other income (expense), net.

Our investments in available-for-sale marketable securities had a minimum credit quality rating of A2 (Moody's), A (Standard & Poor's) and A (Fitch). We do not plan to sell the investments, and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost basis, which may be maturity.

NOTE 6 - CONTINGENCIES AND COMMITMENTS

We are involved in various ongoing proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor, intellectual property and other matters, the most significant of which are more fully described below. The outcomes of these matters will generally not be known for prolonged periods of time. In certain of the legal proceedings the claimants seek damages as well as other

compensatory and equitable relief that could result in the payment of significant claims and settlements and/or the imposition of injunctions or other equitable relief. For legal matters for which management had sufficient information to reasonably estimate our future obligations, a liability representing management's best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within the range is not known, is recorded. The estimates are based on consultation with legal counsel, previous settlement experience and settlement strategies. If actual outcomes are less favorable than those estimated by management, additional expense may be incurred, which could unfavorably affect future operating results. We are self-insured for certain claims and expenses. The ultimate cost to us with respect to product liability claims could be materially different than the amount of the current estimates and accruals and could have a material adverse effect on our financial position, results of operations and cash flows.

In ~~April 2022 the United States District Court for the District of Delaware issued a judgment following a jury verdict in favor of~~February 2024 we reached an agreement with PureWick Corporation ~~(PureWick) for~~and its ~~2019 complaint seeking~~affiliates to settle patent infringement ~~damages~~claims related to our PrimaFit and PrimoFit products. ~~Following~~The terms of the settlement agreement are confidential and did not have a ~~jury trial, the court awarded damages related~~significant impact to ~~this complaint and we~~our previously recorded ~~charges of $28 in March 2022. Stryker plans to appeal the~~reserves, financial position, results of the trial. If ultimately successful, PureWick may seek to recover its legal fees. In June 2022 PureWick filed a motion to enhance the damages awarded, which the court denied in March 2023. In 2022 PureWick also filed a separate complaint seeking additional patent infringement damages related to our current PrimaFit products. A trial for this matter is currently set for December 2023.operations or cash flows.


~~Dollar amounts are in millions except per share amounts or as otherwise specified.~~			7


~~STRYKER CORPORATION~~						~~2023 Third Quarter Form 10-Q~~

We are currently investigating whether certain business activities in certain foreign countries violated provisions of the Foreign Corrupt Practices Act (FCPA) and have engaged outside counsel to conduct these investigations. We have been contacted by the United States Securities and Exchange Commission, United States Department of Justice and certain other regulatory authorities and are cooperating with these agencies. At this time we are unable to predict the outcome of the investigations or the potential impact, if any, on our financial statements.

~~Recall Matters~~

We have conducted voluntary recalls of certain products, including our Rejuvenate and ABG II Modular-Neck hip stems and certain lot-specific sizes and offsets of LFIT Anatomic CoCr V40 Femoral Heads. Additionally, we are responsible for certain product liability claims, primarily related to certain hip products sold by Wright Medical Group N.V. (Wright) prior to its 2014 divestiture of the OrthoRecon business.

We have incurred, and expect to incur in the future, costs associated with the defense and settlement of claims and ~~lawsuits related to our recalls.~~lawsuits. Based on the information that has been received ~~we have recorded reserves of $198,~~related to the matters discussed above, our accrual for these matters was $277 at March 31, 2024, representing our best estimate of probable ~~loss related to recall matters globally.~~loss. The final outcomes of these matters are dependent on many factors that are difficult to predict. Accordingly the ultimate cost related to these matters may be materially different than the amount of our current estimate and accruals and could have a material adverse effect on our results of operations and cash flows.


Leases	Leases	September 30			December 31			Leases	March 31			December 31
		2023			2022				2024			2023
Right-of-use assets	Right-of-use assets	$	491		$	473
Lease liabilities, current	Lease liabilities, current	$	130		$	121
Lease liabilities, non-current	Lease liabilities, non-current	$	369		$	357

Other information:	Other information:
Other information:
Other information:
Weighted-average remaining lease term (years)
Weighted-average remaining lease term (years)
Weighted-average remaining lease term (years)	Weighted-average remaining lease term (years)	5.5			5.5			5.2			5.5
Weighted-average discount rate	Weighted-average discount rate	3.73		%	3.22		%	Weighted-average discount rate	3.92	%		3.87	%

Three Months Nine Months
2023 2022 2023 2022
Operating lease cost $ 48 $ 37 $ 127 $ 110


	Three Months
	2024		2023
Operating lease cost	$	47	$	38


Dollar amounts are in millions except per share amounts or as otherwise specified.			7


STRYKER CORPORATION						2024 First Quarter Form 10-Q

NOTE 7 - ACQUISITIONS

We acquire stock in companies and various assets that continue to support our capital deployment and product development strategies. In the ~~nine~~three months ~~2023~~2024 and ~~2022~~2023 cash paid for acquisitions, net of cash acquired was ~~$390~~$246 and ~~$2,563.~~$0.

On March 20, 2024 we acquired SERF SAS (SERF) for a purchase price of $246. SERF's implants strengthen the global portfolio of our Joint Replacement business within Orthopaedics and Spine. The purchase price allocation for SERF is based on preliminary valuations, primarily related to developed technology and customer relationships. Goodwill attributable to the acquisition is not deductible for tax purposes.

In May 2, 2023 we acquired Cerus for net cash consideration of $289 and up to $225 in future milestone payments that had a fair value of $192 at the acquisition date. Cerus designs, develops and manufactures neurovascular products used for the treatment of hemorrhagic stroke. Cerus is part of our Neurovascular business within MedSurg and Neurotechnology. Goodwill attributable to the acquisition is not deductible for tax purposes.

~~In February 2022 we completed the acquisition of Vocera Communications, Inc. (Vocera) for $79.25 per share, or an aggregate~~The purchase price of $2.6 billion, net of cash acquired ($3.0 billion including convertible notes). Vocera is a leader in the digital care coordination and communication category. Vocera is part of our Medical business within MedSurg and Neurotechnology. Goodwill attributable to the acquisition reflects the strategic benefits of expanding our presence in adjacent markets, diversifying our product portfolio, advancing innovations,

allocation for Cerus is:

~~and accelerating our digital aspirations. This goodwill is not deductible for tax purposes~~.

In the nine months 2022 note holders elected to redeem the 1.50% and 0.50% convertible notes assumed in the Vocera acquisition for $101 and $324. These repayments are classified as financing activities in the Consolidated Statements of Cash Flows.

~~Share-based awards for Vocera employees vested upon our acquisition and a charge of $132 was recorded in selling, general and administrative expenses in 2022.~~

~~Purchase price allocations for our significant acquisitions are:~~

Purchase Price Allocation of Acquired Net Assets
2023 2022
Cerus Vocera
Tangible assets acquired:
Accounts receivable $ 1 $ 33
Inventory 2 13
Deferred income tax assets 7 91
Other assets 1 92
Debt — (425)
Deferred income tax liabilities (60) (193)
Other liabilities (22) (117)
Intangible assets:
Customer and distributor relationships — 603
Developed technology 240 175
Trade name — 18
Goodwill 312 2,273
Purchase price, net of cash acquired of $7 and $281 $ 481 $ 2,563
Weighted average amortization period at acquisition (years):
Developed technologies 13 6
Customer relationships — 15
Trademarks — 9


Purchase Price Allocation of Acquired Net Assets

2023	Cerus
Tangible assets acquired:
Accounts receivable	$	1
Inventory	2
Deferred income tax assets	4
Other assets	1

Deferred income tax liabilities	(60)
Other liabilities	(22)
Intangible assets:

Developed technology	240

Goodwill	315
Purchase price, net of cash acquired of $7	$	481
Weighted average amortization period at acquisition (years):
Developed technologies	13

The purchase price allocation for Cerus is based on preliminary valuations, primarily related to developed technology and deferred income taxes. Our estimates and assumptions are subject to change within the measurement period. ~~The purchase price allocation for Vocera was finalized in the first quarter 2023 without material adjustments.~~


Consolidated Estimated Amortization Expense	Consolidated Estimated Amortization Expense									Consolidated Estimated Amortization Expense
Remainder of 2023		2024		2025		2026		2027
Remainder of 2024										Remainder of 2024	2025	2026	2027	2028
$	159	$	607	$	590	$	533	$	512

NOTE 8 - DEBT AND CREDIT FACILITIES

We have lines of credit issued by various financial institutions that are available to fund our day-to-day operating needs. ~~Our~~Certain of our credit facilities require us to comply with financial and other covenants. We were in compliance with all covenants on ~~September 30, 2023.~~

~~In August 2023 we repaid the remaining balance of $650 on the $1.5 billion term loan scheduled to mature on February 22, 2025. We also issued €500 of floating rate senior notes due November 16,~~March 31, 2024. The notes bear interest at a base rate based on the three-month Euro Interbank Offered Rate (EURIBOR) plus 0.3%. The notes are callable at February 16, 2024, May 16, 2024 or October 16, 2024 either by us or at the option of the notes holders. These notes are classified within current maturities of debt on our Consolidated Balance Sheet as of September 30, 2023.


~~Dollar amounts are in millions except per share amounts or as otherwise specified.~~			8


~~STRYKER CORPORATION~~						~~2023 Third Quarter Form 10-Q~~

~~In the first quarter 2022 our Board of Directors approved an increase to the maximum amount of commercial paper that can be outstanding from $1,500 to $2,250.~~

On ~~September 30, 2023~~March 31, 2024 there were no borrowings outstanding under our revolving credit facility or our commercial paper program which allows for maturities up to 397 days from the date of issuance. The maximum amount of our commercial paper that can be outstanding at any time is $2,250.

Summary of Total Debt September December
2023 2022
Rate Due
Senior unsecured notes:
1.125% November 30, 2023 $ 580 $ 585
0.600% December 1, 2023 600 599
3.375% May 15, 2024 598 596
Various November 16, 2024 527 —
0.250% December 3, 2024 895 903
1.150% June 15, 2025 648 647
3.375% November 1, 2025 749 748
3.500% March 15, 2026 996 995
2.125% November 30, 2027 788 795
3.650% March 7, 2028 598 597
0.750% March 1, 2029 841 848
1.950% June 15, 2030 992 991
2.625% November 30, 2030 679 684
1.000% December 3, 2031 783 790
4.100% April 1, 2043 392 392
4.375% May 15, 2044 396 396
4.625% March 15, 2046 983 983
2.900% June 15, 2050 642 642
Term loan — 850
Other 3 7
Total debt $ 12,690 $ 13,048
Less current maturities 2,308 1,191
Total long-term debt $ 10,382 $ 11,857
September December
2023 2022
Unamortized debt issuance costs $ 45 $ 52
Borrowing capacity on existing facilities $ 2,160 $ 2,162
Fair value of senior unsecured notes $ 11,333 $ 10,910


Summary of Total Debt			March 31		December 31
			2024		2023
	Rate	Due
Senior unsecured notes:
	3.375%	May 15, 2024	$	600	$	600
	Floating	November 16, 2024	540		554
	0.250%	December 3, 2024	918		940
	1.150%	June 15, 2025	649		648
	3.375%	November 1, 2025	749		749
	3.500%	March 15, 2026	997		997
	2.125%	November 30, 2027	808		828
	3.650%	March 7, 2028	598		598
	4.850%	December 8, 2028	596		596
	3.375%	December 11, 2028	645		661
	0.750%	March 1, 2029	861		883
	1.950%	June 15, 2030	991		991
	2.625%	November 30, 2030	696		713
	1.000%	December 3, 2031	803		823
	4.100%	April 1, 2043	393		393
	4.375%	May 15, 2044	396		396
	4.625%	March 15, 2046	983		983
	2.900%	June 15, 2050	642		642



Total debt			$	12,865	$	12,995
Less current maturities			2,058		2,094
Total long-term debt			$	10,807	$	10,901

			March 31		December 31
			2024		2023
Unamortized debt issuance costs			$	34	$	50
Borrowing capacity on existing facilities			$	2,159	$	2,160
Fair value of senior unsecured notes			$	12,008	$	12,252

The fair value of the senior unsecured notes was estimated using quoted interest rates, maturities and amounts of borrowings based on quoted active market prices and yields that took into account the underlying terms of the debt instruments. Substantially all of our debt is classified within Level 2 of the fair value hierarchy.

NOTE 9 - INCOME TAXES

NOTE 10 - SEGMENT INFORMATION


		Three Months				Nine Months
		2023		2022		2023		2022
		Three Months
		Three Months
		Three Months
		2024
		2024
		2024
MedSurg and Neurotechnology
MedSurg and Neurotechnology
MedSurg and Neurotechnology	MedSurg and Neurotechnology	$	2,859	$	2,588	$	8,409	$	7,560
Orthopaedics and Spine	Orthopaedics and Spine	2,050		1,891		6,274		5,687
Orthopaedics and Spine
Orthopaedics and Spine
Net sales
Net sales
Net sales	Net sales	$	4,909	$	4,479	$	14,683	$	13,247
MedSurg and Neurotechnology	MedSurg and Neurotechnology	$	859	$	611	$	2,266	$	1,870
MedSurg and Neurotechnology
MedSurg and Neurotechnology
Orthopaedics and Spine
Orthopaedics and Spine
Orthopaedics and Spine	Orthopaedics and Spine	499		534		1,701		1,616
Segment operating income	Segment operating income	$	1,358	$	1,145	$	3,967	$	3,486
Segment operating income
Segment operating income
Items not allocated to segments:
Items not allocated to segments:
Items not allocated to segments:	Items not allocated to segments:
Corporate and other	Corporate and other	$	(209)	$	(144)	$	(596)	$	(488)
Corporate and other
Corporate and other
Acquisition and integration-related costs
Acquisition and integration-related costs
Acquisition and integration-related costs	Acquisition and integration-related costs	1		78		(7)		(108)
Amortization of intangible assets	Amortization of intangible assets	(164)		(159)		(486)		(469)
Amortization of intangible assets
Amortization of intangible assets
Structural optimization and other special charges
Structural optimization and other special charges
Structural optimization and other special charges	Structural optimization and other special charges	(28)		(58)		(142)		(229)
Medical device regulations	Medical device regulations	(19)		(38)		(74)		(98)
Medical device regulations
Medical device regulations
Recall-related matters	Recall-related matters	(9)		4		(12)		(14)
Recall-related matters
Recall-related matters
Regulatory and legal matters
Regulatory and legal matters
Regulatory and legal matters	Regulatory and legal matters	1		(20)		(19)		(53)

Consolidated operating income	Consolidated operating income	$	931	$	808	$	2,631	$	2,027

Consolidated operating income

Consolidated operating income

There were no significant changes to total assets by segment from the information provided in our Annual Report on Form 10-K for ~~2022.~~2023.


Dollar amounts are in millions except per share amounts or as otherwise specified.			98


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q


ITEM 2.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ABOUT STRYKER

Stryker is ~~one of the world's leading~~a global leader in medical ~~technology companies~~technologies and, together with our customers, we are driven to make healthcare better. We offer innovative products and services in ~~Medical and Surgical,~~MedSurg, Neurotechnology, Orthopaedics and Spine that help improve patient and healthcare outcomes. Alongside ~~its~~our customers around the world, ~~Stryker impacts~~we impact more than ~~130~~150 million patients annually.

We segregate our operations into two reportable business segments: (i) MedSurg and Neurotechnology and (ii) Orthopaedics and Spine. MedSurg and Neurotechnology products include surgical equipment and navigation systems (Instruments), endoscopic and communications systems (Endoscopy), patient handling, emergency medical equipment and intensive care disposable products (Medical), minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke (Neurovascular), a comprehensive line of products for traditional brain and open skull based surgical procedures; orthobiologic and biosurgery products, including synthetic bone grafts and vertebral augmentation products (Neuro Cranial). Orthopaedics and Spine products consist primarily of implants used in hip and knee joint replacements and trauma and extremity surgeries, and cervical, thoracolumbar and interbody systems used in spinal injury, deformity and degenerative therapies.

Macroeconomic Environment

The global economy continues to experience increased inflationary pressures in part due to global supply chain disruptions, labor shortages and other impacts of the macroeconomic environment which we anticipate will continue. Higher interest rates and capital costs, higher shipping costs, increased costs of labor, fluctuating foreign currency exchange rates and the military conflicts in Russia and Ukraine and the Middle East ~~have created~~result in additional economic challenges and uncertainties. These conditions may cause our customers to decrease or delay orders for our products and services, and the higher interest rates may impact deal mix for our capital products.

~~China Volume-Based Procurement, Import Purchase Evaluation and Anti-Corruption Campaign~~

The government in China has launched regional and national programs for volume-based procurement (VBP) of high-value medical consumables to reduce healthcare costs. Each VBP program has specific requirements to award contracts to the lowest bidders who are able to satisfy the quality and quantity requirements. The successful bidders may be guaranteed sales volume for certain products, while unsuccessful bidders may lose unit sales volume. We have been a winning bidder in certain national and regional VBP programs, including those for joint replacement and trauma products in 2021, certain neurovascular products in the fourth quarter 2022 and the first nine months of 2023 and for the renewal of trauma products in the third quarter 2023. The prices required for a successful bid have negatively impacted the commercial operations of our joint replacement, trauma and certain neurovascular products in China.

~~We were unsuccessful in our bids in the VBP program for spine products that took place in the third quarter 2022 and as a result we are exiting the spine business in China. To date our other~~

~~businesses have not been significantly impacted, but may be in the future as a result of additional VBP programs.~~ In the second quarter 2023 government agencies announced data collection initiatives for sports medicine, biologics and craniomaxilliofacial products in preparation for VBP programs that could be announced as soon as the fourth quarter 2023. The impact of VBP programs, if any, for these products is not expected to be significant.

China has also issued national guiding standards for Import Purchase Evaluation which has increased the purchase of locally sourced equipment in China's public hospitals and is impacting our MedSurg business in China. Additionally, China's National Health Commission has launched an anti-corruption campaign focused on investigating government officials and individuals employed by state-owned entities and public institutions in the healthcare sector. We have seen some limitations to physician and surgeon access, but our business has not been significantly impacted. Our business in China represented approximately 1.9% of our revenues in the nine months 2023.

Overview of the Three ~~and Nine~~ Months

In the three months ~~2023~~2024 we achieved sales growth of ~~9.6%~~9.7% from ~~2022.~~2023. Excluding the impact of acquisitions and divestitures sales grew ~~9.2%~~10.0% in constant currency. We reported operating income margin of ~~19.0%~~18.5%, net earnings of ~~$692~~$788 and net earnings per diluted share of ~~$1.80.~~$2.05. Excluding the impact of certain items, adjusted operating income margin(1) increased by ~~110~~80 basis points to ~~23.4%~~21.9%, with adjusted net earnings(1) of ~~$944~~$962 and adjusted net earnings per diluted share(1) of ~~$2.46,~~$2.50, an increase of ~~16.0%~~16.8% from ~~2022.~~

In the nine months 2023 we achieved sales growth of 10.8% from 2022. Excluding the impact of acquisitions and divestitures sales grew 11.5% in constant currency. We reported operating income margin of 17.9%, net earnings of $2,022 and net earnings per diluted share of $5.27. Excluding the impact of certain items, adjusted operating income margin~~(1)~~ ~~increased by 40 basis points to 23.0%, with adjusted net earnings(1)~~ ~~of $2,740 and adjusted net earnings per diluted share(1)~~ ~~of $7.14, an increase of 12.6% from 2022.~~2023.

Recent Developments

~~In May 2023~~On March 20, 2024 we acquired ~~Cerus Endovascular Limited (Cerus)~~SERF for ~~net cash consideration~~a purchase price of ~~$289 and up to $225 in future milestone payments. Cerus designs, develops and manufactures neurovascular products used for~~$246. SERF's implants strengthen the ~~treatment of hemorrhagic stroke. Cerus is part~~global portfolio of our ~~Neurovascular~~Joint Replacement business within ~~MedSurg~~Orthopaedics and ~~Neurotechnology.~~Spine. Refer to Note 7 to our Consolidated Financial Statements for further information.

In August 2023 we repaid the remaining balance of $650 on the $1.5 billion term loan scheduled to mature on February 22, 2025 and issued €500 of floating rate senior notes due November 16, 2024. The notes bear interest at a base rate based on the three-month Euro Interbank Offered Rate (EURIBOR) plus 0.3%.

(1) Refer to "Non-GAAP Financial Measures" for a discussion of non-GAAP financial measures used in this report and a reconciliation to the most directly comparable GAAP financial measure.


CONSOLIDATED RESULTS OF OPERATIONS
	Three Months
					Percent Net Sales				Percentage
	2024		2023		2024		2023		Change
Net sales	$	5,243	$	4,778	100.0	%	100.0	%	9.7	%
Gross profit	3,333		3,016		63.6		63.1		10.5
Research, development and engineering expenses	368		339		7.0		7.1		8.6
Selling, general and administrative expenses	1,840		1,781		35.1		37.3		3.3

Amortization of intangible assets	153		161		2.9		3.4		(5.0)

Other income (expense), net	(49)		(56)		(0.9)		(1.2)		(12.5)
Income taxes	135		87		nm		nm		55.2
Net earnings	$	788	$	592	15.0	%	12.4	%	33.1	%

Net earnings per diluted share	$	2.05	$	1.54					33.1	%
Adjusted net earnings per diluted share(1)	$	2.50	$	2.14					16.8	%

nm - not meaningful


Dollar amounts are in millions except per share amounts or as otherwise specified.			109


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

CONSOLIDATED RESULTS OF OPERATIONS
Three Months Nine Months
Percent Net Sales Percentage Percent Net Sales Percentage
2023 2022 2023 2022 Change 2023 2022 2023 2022 Change
Net sales $ 4,909 $ 4,479 100.0 % 100.0 % 9.6 % $ 14,683 $ 13,247 100.0 % 100.0 % 10.8 %
Gross profit 3,158 2,782 64.3 62.1 13.5 9,355 8,342 63.7 63.0 12.1
Research, development and engineering expenses 353 364 7.2 8.1 (3.0) 1,038 1,128 7.1 8.5 (8.0)
Selling, general and administrative expenses 1,701 1,455 34.7 32.5 16.9 5,188 4,704 35.3 35.5 10.3
Recall charges, net 9 (4) 0.2 (0.1) (325.0) 12 14 0.1 0.1 (14.3)
Amortization of intangible assets 164 159 3.3 3.5 3.1 486 469 3.3 3.5 3.6
Other income (expense), net (62) 8 (1.3) 0.2 nm (184) (105) (1.3) (0.8) 75.2
Income taxes 177 — nm nm nm 425 127 nm nm 234.6
Net earnings $ 692 $ 816 14.1 % 18.2 % (15.2) % $ 2,022 $ 1,795 13.8 % 13.6 % 12.6 %
Net earnings per diluted share $ 1.80 $ 2.14 (15.9) % $ 5.27 $ 4.70 12.1 %
Adjusted net earnings per diluted share(1)
$ 2.46 $ 2.12 16.0 % $ 7.14 $ 6.34 12.6 %


Geographic and Segment Net Sales	Three Months
					Percentage Change
	2024		2023		As Reported		Constant Currency
Geographic:
United States	$	3,914	$	3,512	11.4	%	11.4	%
International	1,329		1,266		4.9		6.8
Total	$	5,243	$	4,778	9.7	%	10.2	%
Segment:
MedSurg and Neurotechnology	$	2,999	$	2,690	11.5	%	12.0	%
Orthopaedics and Spine	2,244		2,088		7.5		8.0
Total	$	5,243	$	4,778	9.7	%	10.2	%


Supplemental Net Sales Growth Information
	Three Months
					Percentage Change
									United States		International
	2024		2023		As Reported		Constant Currency		As Reported		As Reported		Constant Currency
MedSurg and Neurotechnology:
Instruments	$	667	$	566	17.7	%	17.9	%	20.3	%	8.6	%	9.8	%
Endoscopy	778		707		10.1		10.5		11.1		5.9		8.1
Medical	864		778		11.0		11.1		16.8		(10.3)		(9.5)
Neurovascular	310		284		9.1		11.4		2.9		13.4		17.5
Neuro Cranial	380		355		7.0		7.5		7.0		6.7		9.5

	$	2,999	$	2,690	11.5	%	12.0	%	13.8	%	4.3	%	6.4	%
Orthopaedics and Spine:
Knees	$	588	$	566	4.0	%	4.5	%	3.1	%	6.3	%	8.2	%
Hips	393		375		5.1		6.1		6.8		2.1		5.0
Trauma and Extremities	830		769		7.9		8.0		10.3		1.7		2.1
Spine	300		284		5.5		5.7		3.9		10.2		11.1
Other	133		94		41.2		44.2		45.6		33.1		41.4
	$	2,244	$	2,088	7.5	%	8.0	%	8.3	%	5.6	%	7.4	%
Total	$	5,243	$	4,778	9.7	%	10.2	%	11.4	%	4.9	%	6.8	%

Note:

~~nm - not meaningful~~

Geographic and Segment Net Sales Three Months Nine Months
Percentage Change Percentage Change
2023 2022 As Reported Constant
Currency 2023 2022 As Reported Constant
Currency
Geographic:
United States $ 3,678 $ 3,360 9.5 % 9.5 % $ 10,901 $ 9,776 11.5 % 11.5 %
International 1,231 1,119 10.0 8.9 3,782 3,471 9.0 12.2
Total $ 4,909 $ 4,479 9.6 % 9.3 % $ 14,683 $ 13,247 10.8 % 11.7 %
Segment:
MedSurg and Neurotechnology $ 2,859 $ 2,588 10.5 % 10.3 % $ 8,409 $ 7,560 11.2 % 12.1 %
Orthopaedics and Spine 2,050 1,891 8.4 8.0 6,274 5,687 10.3 11.1
Total $ 4,909 $ 4,479 9.6 % 9.3 % $ 14,683 $ 13,247 10.8 % 11.7 %

Supplemental Net Sales Growth Information
Three Months Nine Months
Percentage Change Percentage Change
United States International United States International
2023 2022 As Reported Constant Currency As Reported As Reported Constant Currency 2023 2022 As Reported Constant Currency As Reported As Reported Constant Currency
MedSurg and Neurotechnology:
Instruments $ 628 $ 535 17.6 % 17.1 % 18.7 % 13.3 % 11.1 % $ 1,833 $ 1,626 12.8 % 13.4 % 13.6 % 9.6 % 12.5 %
Endoscopy 738 662 11.3 11.3 10.6 14.7 14.5 2,141 1,946 10.0 10.6 9.9 10.4 14.0
Medical 798 765 4.3 4.0 5.7 (2.0) (3.4) 2,417 2,095 15.4 15.9 15.9 13.1 16.1
Neurovascular 311 294 5.9 6.5 8.7 4.2 5.3 906 901 0.6 3.1 8.3 (4.0) (0.1)
Neuro Cranial 384 332 15.5 15.5 14.5 20.4 19.8 1,112 992 12.1 12.7 11.1 16.8 20.8
$ 2,859 $ 2,588 10.5 % 10.3 % 11.2 % 7.9 % 7.4 % $ 8,409 $ 7,560 11.2 % 12.1 % 12.6 % 7.0 % 10.5 %
Orthopaedics and Spine:
Knees $ 515 $ 481 7.1 % 6.9 % 5.3 % 12.8 % 12.0 % $ 1,643 $ 1,445 13.7 % 14.5 % 11.9 % 19.1 % 22.5 %
Hips 362 347 4.5 4.4 3.0 7.1 6.8 1,130 1,038 8.9 10.4 9.1 8.4 12.6
Trauma and Extremities 752 672 11.9 10.9 11.5 13.0 9.3 2,287 2,033 12.5 13.0 13.2 10.8 12.5
Spine 291 280 4.1 3.3 5.4 0.5 (2.7) 871 849 2.6 3.1 5.6 (5.3) (3.9)
Other 130 111 16.4 17.8 1.8 65.2 70.7 343 322 6.1 8.1 (4.3) 38.2 47.6
$ 2,050 $ 1,891 8.4 % 8.0 % 6.9 % 12.4 % 10.6 % $ 6,274 $ 5,687 10.3 % 11.1 % 10.0 % 11.1 % 14.1 %
Total $ 4,909 $ 4,479 9.6 % 9.3 % 9.5 % 10.0 % 8.9 % $ 14,683 $ 13,247 10.8 % 11.7 % 11.5 % 9.0 % 12.2 %

~~Note:~~ Beginning in the first quarter ~~2023 we consolidated Other MedSurg and Neurotechnology into Endoscopy as Other MedSurg and Neurotechnology (primarily Sustainability Solutions)~~2024, a product line previously included in Instruments has been ~~fully integrated into~~reclassified to Endoscopy to align with a change in our ~~Endoscopy business. Endoscopy includes sales related to Other of $84 and $72 for the three months 2023 and 2022 and $252 and $218 for the nine months 2023 and 2022.~~internal reporting structure. We have reflected ~~these changes~~this change in all historical periods presented.

Consolidated Net Sales

Consolidated net sales increased ~~9.6%~~9.7% in the three months ~~2023~~2024 as reported and 9.3% in constant currency, as foreign currency exchange rates positively impacted net sales by 0.3%. Excluding the 0.1% impact of acquisitions and divestitures, net sales in constant currency increased by 8.9% from increased unit volume and 0.3% due to higher prices. The unit volume increase was due

~~to higher product shipments across all MedSurg and Neurotechnology and Orthopaedics and Spine businesses.~~

~~Consolidated net sales increased 10.8% in the nine months 2023 as reported and 11.7%~~10.2% in constant currency, as foreign currency exchange rates negatively impacted net sales by ~~0.9%~~0.5%. Excluding the 0.2% impact of acquisitions and divestitures, net sales in constant currency increased by ~~11.0%~~9.3% from increased unit


~~Dollar amounts are in millions except per share amounts or as otherwise specified.~~			11


~~STRYKER CORPORATION~~						~~2023 Third Quarter Form 10-Q~~

volume and ~~0.5%~~0.7% due to higher prices. The unit volume increase was due to higher product shipments across all MedSurg and Neurotechnology and Orthopaedics and Spine businesses.

MedSurg and Neurotechnology Net Sales

MedSurg and Neurotechnology net sales increased ~~10.5%~~11.5% in the three months ~~2023~~2024 as reported and 10.3% in constant currency, as foreign currency exchange rates positively impacted net sales by 0.2%. Excluding the 0.2% impact of acquisitions and divestitures, net sales in constant currency increased by 8.7% from increased unit volume and 1.4% from higher prices. The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology businesses.

~~MedSurg and Neurotechnology net sales increased 11.2% in the nine months 2023 as reported and 12.1%~~12.0% in constant currency, as foreign currency exchange rates negatively impacted net sales by ~~0.9%~~0.5%. Excluding the ~~0.3%~~0.4% impact of acquisitions and divestitures, net sales in constant currency increased by 10.2% from increased unit volume and ~~1.6%~~1.4% from higher prices. The unit volume increase was due to higher shipments across all MedSurg and Neurotechnology businesses.

Orthopaedics and Spine Net Sales

Orthopaedics and Spine net sales increased ~~8.4%~~7.5% in the three months ~~2023~~2024 as reported and 8.0% in constant currency, as foreign currency exchange rates ~~positively~~negatively impacted net sales by ~~0.4%~~0.5%. Net sales in constant currency increased ~~9.1%~~8.2% from increased unit volume partially offset by ~~1.1%~~0.2% from lower prices. The unit volume increase was due to higher shipments across all Orthopaedics and Spine businesses.

Orthopaedics and Spine net sales increased 10.3% in the nine months 2023 as reported and 11.1% in constant currency, as foreign currency exchange rates negatively impacted net sales by 0.8%. Net sales in constant currency increased 12.0% from increased unit volume partially offset by 0.9% from lower prices. The unit volume increase was due to higher shipments across all Orthopaedics and Spine businesses.

Gross Profit

Gross profit was ~~$3,158~~$3,333 and ~~$2,782~~$3,016 in the three months ~~2023~~2024 and ~~2022.~~2023. The key components of the change were:


	Gross Profit Percent Net Sales
Three Months ~~2022~~2023	~~62.1~~63.1	%
Sales pricing	1030 bps
Volume and mix	9060 bps
Manufacturing and supply chain costs	~~120~~(40) bps



Three Months ~~2023~~2024	~~64.3~~63.6	%

Gross profit as a percentage of net sales in the three months ~~2023~~2024 increased to ~~64.3%~~63.6% from ~~62.1%~~63.1% in ~~2022~~2023 primarily due to favorable ~~volume and lower manufacturing and supply chain costs primarily due to supply chain challenges impacting the capital products in our MedSurg businesses in the three months 2022.~~

~~Gross profit was $9,355 and $8,342 in the nine months 2023 and 2022. The key components of the change were:~~


	Gross Profit Percent Net Sales
~~Nine Months 2022~~	~~63.0~~	%
~~Sales pricing~~	~~20 bps~~
~~Volume and mix~~	~~100 bps~~
~~Manufacturing and supply chain costs~~	~~(60) bps~~
~~Inventory stepped up to fair value~~	~~10 bps~~


~~Nine Months 2023~~	~~63.7~~	%

Gross profit as a percentage of net sales in the nine months 2023 increased to 63.7% from 63.0% in 2022 due to higher prices and favorable volume offset by higher manufacturing and supply chain costs primarily due to higher raw material costs and supply chain inefficiencies.volumes.

While segment mix was not a significant driver of the change in gross profit as a percent of net sales between the three months 2024 and ~~nine months~~ 2023, ~~and 2022,~~ we generally expect segment mix to have an unfavorable impact for the foreseeable future as we anticipate more rapid sales growth in our lower gross margin MedSurg and Neurotechnology segment than our Orthopaedics and Spine segment.

Research, Development and Engineering Expenses

Research, development and engineering expenses ~~decreased $11~~increased $29 or ~~3.0%~~8.6% in the three months ~~2023 and decreased as~~2024. As a percentage of net sales, ~~to 7.2% from 8.1% in 2022, primarily due to increased costs for product launches and higher spend related to the new medical device regulations in the European Union~~expenses in the three months ~~2022.~~

~~Research, development and engineering expenses decreased $90 or 8.0% in the nine months 2023 and decreased as a percentage~~2024 of net sales to 7.1% from 8.5% in 2022, primarily due to increased costs for product launches, the write-off of certain intangible assets and higher spend related to the new medical device regulations in the European Union in the nine months 2022.

~~Selling, General and Administrative Expenses~~

~~Selling, general and administrative expenses increased $246 or 16.9% in~~7.0% was relatively consistent with the three months 2023 ~~and increased as a percentage~~ of net sales to 34.7% from 32.5% in 2022, primarily due to disciplined increases in spend and investments to support our growth. Expenses as a percentage of net sales in the three months 2022 included the benefit of a reduction of $110 in the fair value of contingent consideration based on our determination that certain commercial and regulatory milestones related to technology acquired in the purchase of Mobius Imaging and Cardan Robotics were no longer probable of being achieved.

Selling, general and administrative expenses increased $484 or 10.3% in the nine months 2023 and decreased as a percentage of net sales to 35.3% from 35.5% in 2022. The increase in selling, general and administrative expenses in the nine months 2023 was primarily due to disciplined increases in spend and investments to support our growth. Expenses as a percentage of net sales in the nine months 2022 included the impact of $132 of charges for share-based awards for Vocera employees that vested upon our acquisition, offset by the benefit of the reduction in fair value of contingent consideration described above.

~~Recall Charges, Net~~

Recall charges, net were a charge of $9 and credit of $4 in the three months and charges of $12 and $14 in the nine months 2023 and 2022. Charges in the three and nine months 2023 were primarily related to LFIT Anatomic CoCr V40 Femoral Heads. Charges in the nine months 2022 were primarily related to Wright hip products. Refer to Note 6 to our Consolidated Financial Statements for further information.

~~Amortization of Intangible Assets~~

Amortization of intangible assets was $164 and $159 in the three months and $486 and $469 in the nine months 2023 and 2022. Refer to Note 7 to our Consolidated Financial Statements for further information.7.1%.


Dollar amounts are in millions except per share amounts or as otherwise specified.			1210


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $59 or 3.3% in the three months 2024 and decreased as a percentage of net sales to 35.1% from 37.3% in 2023, primarily due to charges in the three months 2023 for structural optimization and legal matters, in addition to continued spend discipline in the three months 2024.

Amortization of Intangible Assets

Amortization of intangible assets was $153 and $161 in the three months and 2024 and 2023. Refer to Note 7 to our Consolidated Financial Statements for further information.

Operating Income

Operating income was ~~$931~~$972 and ~~$808~~$735 in the three months ~~2023~~2024 and ~~2022.~~2023. Operating income as a percentage of net sales in the three months ~~2023~~2024 increased to ~~19.0%~~18.5% from ~~18.0%~~15.4% in ~~2022.~~2023. Refer to the ~~comments~~discussion above for ~~discussion of the primary drivers of the change.~~

Operating income was $2,631 and $2,027 in the nine months 2023 and 2022. Operating income as a percentage of net sales in the nine months 2023 increased to 17.9% from 15.3% in 2022. Refer to the comments above for discussion of the primary drivers of the change.

MedSurg and Neurotechnology operating income as a percentage of net sales increased to ~~30.0%~~26.8% in the three months ~~2023~~2024 from ~~23.6%~~23.3% in ~~2022.~~2023. Orthopaedics and Spine operating income as a percentage of net sales decreased to ~~24.3%~~27.0% in the three months ~~2023~~2024 from ~~28.2%~~28.8% in ~~2022.~~2023. The key components of the change were:

Operating Income
Percent Net Sales

MedSurg and Neurotechnology

Orthopaedics and Spine

Three Months 2022

23.6

28.2

Operating Income
Percent Net Sales

MedSurg and Neurotechnology

Orthopaedics and Spine

Three Months 2023

23.3

28.8

Sales pricing

110 bps

(80) bps

Sales pricing

100 bps

(10) bps

Volume

350 bps

440 bps

Volume

370 bps

160 bps

Manufacturing and supply chain costs

500 bps

(280) bps

Manufacturing and supply chain costs

190 bps

(50) bps

Research, development and engineering expenses

0 bps

(80) bps

Research, development and engineering expenses

(100) bps

(90) bps

Selling, general and administrative expenses

(320) bps

(390) bps

Selling, general and administrative expenses

(210) bps

(190) bps

Three Months 2023

30.0

24.3

Three Months 2024

26.8

27.0

The increase in MedSurg and Neurotechnology operating income as a percentage of net sales for the three months was primarily driven by higher prices, higher unit volumes and lower manufacturing and supply chain costs due to ~~supply chain challenges~~easing of inflationary pressures impacting the ~~capital products~~cost of raw materials in our MedSurg businesses ~~in the three months 2022~~ partially offset by higher selling, general and administrative expenses and higher research, development and engineering expenses due to disciplined increases in spend and investments to support our growth.

The decrease in Orthopaedics and Spine operating income as a percentage of net sales for the three months was primarily driven by higher selling, general and administrative expenses ~~due to disciplined increases in spend and investments to support our growth~~ and higher ~~manufacturing~~research, development and ~~supply chain costs primarily due to increased inventory reserves partially offset by higher unit volumes.~~

MedSurg and Neurotechnology operating income as a percentage of net sales increased to 26.9% in the nine months 2023 from 24.7% in 2022. Orthopaedics and Spine operating income as a percentage of net sales decreased to 27.1% in the nine months 2023 from 28.4% in 2022. The key components of the change were:

Operating Income
Percent Net Sales
MedSurg and Neurotechnology Orthopaedics and Spine
Nine Months 2022 24.7 % 28.4 %
Sales pricing 120 bps (60) bps
Volume 400 bps 550 bps
Manufacturing and supply chain costs 60 bps (150) bps
Research, development and engineering expenses 0 bps (20) bps
Selling, general and administrative expenses (360) bps (450) bps
Nine Months 2023 26.9 % 27.1 %

The increase in MedSurg and Neurotechnology operating income as a percentage of net sales for the nine months was primarily driven by higher unit volumes and higher prices partially offset by higher selling, general and administrative expenses due to disciplined increases in spend and investments to support our growth.

~~The decrease in Orthopaedics and Spine operating income as a percentage of net sales for the nine months was primarily driven by higher selling, general and administrative~~engineering expenses due to disciplined increases in spend and investments to support our growth ~~and higher manufacturing and supply chain costs primarily due to supply chain inefficiencies~~ partially offset by higher unit volumes.

Other Income (Expense), Net

Other income (expense), net was ($~~62)~~49) and $8($56) in the three months 2024 and ($184) and ($105) in the nine months 2023 and 2022. The increase in net expense in the three months 2023 was primarily due to higher interest expense and the release of accrued interest of $50 in the three months 2022 related to the effective settlement of the United States federal income tax audit for years 2014 through 2018. The increase in net expense in the nine months 2023 was primarily due to foreign currency fluctuations, higher interest expense and the release of accrued interest of $50 in the nine months 2022 related to the effective settlement of the United States federal income tax audit for years 2014 through 2018, partially offset by higher interest income.2023.

Income Taxes

Our effective tax rates were ~~20.4%~~14.6% and ~~17.4%~~12.8% in the three months 2024 and ~~nine months 2023 and 0.0% and 6.6% in the three and nine months 2022.~~2023. The effective tax rates for the three months 2024 and ~~nine months~~ 2023 ~~and 2022~~ reflect the continued lower effective income tax rates as a result of our European operations and certain discrete tax items. The ~~effective~~Organisation for Economic Cooperation and Development (OECD), which represents a coalition of member countries, has put forth two proposed base erosion and profit shifting frameworks that revise the existing profit allocation and nexus rules (Pillar One) and ensure a minimal level of taxation (Pillar Two). On December 12, 2022 the European Union member states agreed to implement the Inclusive Framework’s global corporate minimum tax ~~rates for~~rate of 15%, and various countries within and outside the ~~three~~European Union have either enacted or proposed new tax laws implementing Pillar Two in 2024. The OECD continues to release additional guidance and ~~nine months 2022 also reflect income~~we anticipate more countries will enact similar tax ~~benefits of $162 due to the effective settlement~~laws. Some of the ~~United States federal income~~new tax ~~audit for years 2014 through 2018. In addition, the~~laws are effective in 2024 while others will be effective in future years. These tax ~~rate for the nine months 2022 reflects the reversal of deferred income~~law changes and any additional contemplated tax on undistributed earnings of foreign subsidiaries as our revised capital plan determined that certain cash outside of the United States would no longer need to be repatriated during the period previously contemplated.law changes could increase tax expense in future periods.

Net Earnings

Net earnings ~~decreased~~increased to ~~$692~~$788 or ~~$1.80~~$2.05 per diluted share in the three months ~~2023~~2024 from ~~$816~~$592 or ~~$2.14~~$1.54 per diluted share in ~~2022. Adjusted net earnings per diluted share(1)~~ ~~was $2.46 in three months 2023, an increase~~2023. Refer to the discussion above for the primary drivers of ~~16.0% from 2022.~~

~~Net earnings increased to $2,022 or $5.27 per diluted share in~~ the ~~nine months 2023 from $1,795 or $4.70 per diluted share in 2022. Adjusted net earnings per diluted share(1)~~ ~~was $7.14 in the nine months 2023, an increase of 12.6% from 2022.~~change.


Dollar amounts are in millions except per share amounts or as otherwise specified.			1311


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

Non-GAAP Financial Measures

We supplement the reporting of our financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; percentage organic sales growth; adjusted gross profit; adjusted selling, general and administrative expenses; adjusted research, development and engineering expenses; adjusted operating income; adjusted other income (expense), net; adjusted income taxes; adjusted effective income tax rate; adjusted net earnings; and adjusted net earnings per diluted share (Diluted EPS). We believe these non-GAAP financial measures provide meaningful information to assist investors and shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results and provide a baseline for analyzing trends in our underlying businesses. Management uses these non-GAAP financial measures for reviewing the operating results of reportable business segments and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures. To measure percentage sales growth in constant currency, we remove the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. Percentage sales growth in constant currency is calculated by translating current and prior year results at the same foreign currency exchange rate. To measure percentage organic sales growth, we remove the impact of changes in foreign currency exchange rates, acquisitions and divestitures, which affect the comparability and trend of sales. Percentage organic sales growth is calculated by translating current year and prior year results at the same foreign currency exchange rates excluding the impact of acquisitions and divestitures. To measure earnings performance on a consistent and comparable basis, we exclude certain items that affect the comparability of operating results and the trend of earnings. The income tax effect of each adjustment was determined based on the tax effect of the jurisdiction in which the related pre-tax adjustment was recorded. These adjustments are irregular in timing and may not be indicative of our past and future performance. The following are examples of the types of adjustments that may be included in a period:

1.Acquisition and integration-related costs. Costs related to integrating recently acquired businesses (e.g., costs associated with the termination of sales relationships, employee retention and workforce reductions, manufacturing integration costs and other integration-related activities), changes in the fair value of contingent consideration, amortization of inventory stepped-up to fair value, ~~and~~ specific costs (e.g., deal ~~costs)~~costs and costs associated with legal entity rationalization) related to the consummation of the acquisition process and legal entity ~~rationalization.~~rationalization and acquisition-related tax items.

2.Amortization of purchased intangible assets. Periodic amortization expense related to purchased intangible assets.

3.Structural optimization and other special charges. Costs associated with employee retention and workforce reductions, the closure or transfer of manufacturing and other facilities (e.g., site closure costs, contract termination costs and redundant employee costs during the work transfers), product line exits (primarily inventory, long-lived

asset and specifically-identified intangible asset write-offs), certain long-lived and intangible asset write-offs and

impairments and other charges.

4.Medical device regulations. Costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the new medical device reporting regulations and other requirements of the European Union.

5.Recall-related matters. Changes in our best estimate of the probable loss, or the minimum of the range of probable ~~loss~~losses when a best estimate within a range is not known, to resolve the Rejuvenate, LFIT V40, Wright legacy hip products and other product recalls.

6.Regulatory and legal matters. Changes in our best estimate of the probable loss, or the minimum of the range of probable ~~loss~~losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.

7.Tax matters. Impact of accounting for certain significant and discrete tax items.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, selling, general and administrative expenses, research, development and engineering expenses, operating income, other income (expense), net, income taxes, effective income tax rate, net earnings and net earnings per diluted share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures at the end of the discussion of Consolidated Results of Operations below. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The weighted-average diluted shares outstanding used in the calculation of ~~non-GAAP~~adjusted net earnings per diluted share are the same as those used in the calculation of reported net earnings per diluted share for the respective period.


Dollar amounts are in millions except per share amounts or as otherwise specified.			1412


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2023 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Income Taxes Net Earnings Effective
Tax Rate Diluted EPS
Reported $ 3,158 $ 1,701 $ 353 $ 931 $ (62) $ 177 $ 692 20.4 % $ 1.80
Reported percent net sales 64.3 % 34.7 % 7.2 % 19.0 % (1.3) % nm 14.1 %
Acquisition and integration-related costs:
Inventory stepped-up to fair value — — — — — — — — —
Other acquisition and integration-related (a) — 1 — (1) — (28) 27 (3.1) 0.07
Amortization of purchased intangible assets — — — 164 — 36 128 1.6 0.34
Structural optimization and other special charges (b) 19 (9) — 28 — 7 21 0.3 0.06
Medical device regulations (c) 1 — (18) 19 — 4 15 0.2 0.04
Recall-related matters (d) — — — 9 — 2 7 0.1 0.01
Regulatory and legal matters (e) — 1 — (1) — 1 (2) 0.1 —
Tax matters (f) — — — — 1 (55) 56 (6.4) 0.14
Adjusted $ 3,178 $ 1,694 $ 335 $ 1,149 $ (61) $ 144 $ 944 13.2 % $ 2.46
Adjusted percent net sales 64.7 % 34.5 % 6.8 % 23.4 % (1.2) % nm 19.2 %

Three Months 2022 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Income Taxes Net Earnings Effective
Tax Rate Diluted EPS
Reported $ 2,782 $ 1,455 $ 364 $ 808 $ 8 $ — $ 816 — % $ 2.14
Reported percent net sales 62.1 % 32.5 % 8.1 % 18.0 % 0.2 % nm 18.2 %
Acquisition and integration-related costs:
Inventory stepped-up to fair value — — — — — — — — —
Other acquisition and integration-related (a) — 78 — (78) — 4 (82) 2.0 (0.21)
Amortization of purchased intangible assets — — — 159 — 27 132 0.5 0.34
Structural optimization and other special charges (b) 19 (31) (8) 58 — 8 50 — 0.13
Medical device regulations (c) 1 2 (39) 38 — 6 32 0.1 0.08
Recall-related matters (d) — — — (4) — — (4) — (0.01)
Regulatory and legal matters (e) — (20) — 20 — 5 15 0.2 0.04
Tax matters (f) — — — — (62) 87 (149) 11.7 (0.39)
Adjusted $ 2,802 $ 1,484 $ 317 $ 1,001 $ (54) $ 137 $ 810 14.5 % $ 2.12
Adjusted percent net sales 62.6 % 33.1 % 7.1 % 22.3 % (1.2) % nm 18.1 %


~~(a)~~			Charges represent certain acquisition and integration-related costs associated with acquisitions, including charges for termination of sales relationships ($2 in 2023, $2 in 2022), employee retention and workforce reductions ($3 in 2023, $11 in 2022), changes in the fair value of contingent consideration (($4) in 2023, ($107) in 2022), manufacturing integration costs ($0 in 2023, $6 in 2022), adjustments to acquisition-related tax provisions (charges of $28 included in Income Taxes for 2023, $0 for 2022) and other integration-related activities such as deal costs and costs associated with legal entity rationalization (($2) in 2023, $10 in 2022).
~~(b)~~			Charges represent the costs associated with employee retention and workforce reductions (($5) in 2023, $7 in 2022), the closure/transfer of manufacturing and other facilities, including site closure costs, contract termination costs and redundant employee costs during the work transfers ($12 in 2023, $16 in 2022), product line exits (primarily inventory, long-lived asset and specifically-identified intangible asset write-offs) ($7 in 2023, $15 in 2022), certain long-lived and intangible asset write-offs and impairments ($9 in 2023, $12 in 2022) and other charges ($5 in 2023, $8 in 2022).
~~(c)~~			Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.
~~(d)~~			~~Charges represent changes in our best estimate of the minimum of the range of probable loss to resolve certain recall-related matters.~~
~~(e)~~			~~Charges represent changes in our best estimate of the minimum of the range of probable loss to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.~~
~~(f)~~			Benefits and charges represent the accounting impact of certain significant and discrete tax items, including adjustments related to the transfer of certain intellectual properties between tax jurisdictions (charges of $44 in 2023 and $46 in 2022) and certain tax audit settlements ($0 for 2023, benefit of $45 included in Other Income (Expense) and benefit of $162 included in Income Taxes for 2022).

Nine Months 2023 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Income Taxes Net Earnings Effective
Tax Rate Diluted EPS
Reported $ 9,355 $ 5,188 $ 1,038 $ 2,631 $ (184) $ 425 $ 2,022 17.4 % $ 5.27
Reported percent net sales 63.7 % 35.3 % 7.1 % 17.9 % (1.3) % nm 13.8 %
Acquisition and integration-related costs:
Inventory stepped-up to fair value — — — — — — — — —
Other acquisition and integration-related (a) — (7) — 7 — (25) 32 (1.0) 0.08
Amortization of purchased intangible assets — — — 486 — 104 382 1.5 1.00
Structural optimization and other special charges (b) 30 (112) — 142 — 32 110 0.5 0.29
Medical device regulations (c) 1 — (73) 74 — 17 57 0.3 0.15
Recall-related matters (d) — — — 12 — 3 9 — 0.02
Regulatory and legal matters (e) — (19) — 19 — 4 15 — 0.04
Tax matters (f) — — — — (8) (121) 113 (4.9) 0.29
Adjusted $ 9,386 $ 5,050 $ 965 $ 3,371 $ (192) $ 439 $ 2,740 13.8 % $ 7.14
Adjusted percent net sales 63.9 % 34.4 % 6.6 % 23.0 % (1.3) % nm 18.7 %


Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
Three Months 2024	Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Other Income (Expense), Net			Income Taxes		Net Earnings			Effective Tax Rate		Diluted EPS
Reported	$	3,333		$	1,840		$	368		$	972		$	(49)		$	135	$	788		14.6	%	$	2.05
Reported percent net sales	63.6		%	35.1		%	7.0		%	18.5		%	(0.9)		%	nm		15.0		%
Acquisition and integration-related costs:
Inventory stepped-up to fair value	—			—			—			—			—			—		—			—		—
Other acquisition and integration-related (a)	—			13			—			(13)			—			1		(14)			0.3		(0.04)
Amortization of purchased intangible assets	—			—			—			153			—			32		121			1.4		0.31
Structural optimization and other special charges (b)	3			(11)			—			14			—			3		11			0.2		0.03
Medical device regulations (c)	1			—			(12)			13			—			3		10			0.1		0.03
Recall-related matters (d)	—			(5)			—			5			—			1		4			0.1		0.01
Regulatory and legal matters (e)	—			(2)			—			2			—			1		1			—		—
Tax matters (f)	—			—			—			—			—			(41)		41			(4.4)		0.11
Adjusted	$	3,337		$	1,835		$	356		$	1,146		$	(49)		$	135	$	962		12.3	%	$	2.50
Adjusted percent net sales	63.6		%	35.0		%	6.8		%	21.9		%	(0.9)		%	nm		18.3		%


Three Months 2023	Gross Profit			Selling, General & Administrative Expenses			Research, Development & Engineering Expenses			Operating Income			Other Income (Expense), Net			Income Taxes		Net Earnings			Effective Tax Rate		Diluted EPS
Reported	$	3,016		$	1,781		$	339		$	735		$	(56)		$	87	$	592		12.8	%	$	1.54
Reported percent net sales	63.1		%	37.3		%	7.1		%	15.4		%	(1.2)		%	nm		12.4		%
Acquisition and integration-related costs:
Inventory stepped-up to fair value	—			—			—			—			—			—		—			—		—
Other acquisition and integration-related (a)	—			(6)			—			6			—			1		5			0.1		0.01
Amortization of purchased intangible assets	—			—			—			161			—			34		127			2.0		0.33
Structural optimization and other special charges (b)	2			(40)			—			42			—			8		34			0.3		0.09
Medical device regulations (c)	—			—			(28)			28			—			5		23			0.2		0.06
Recall-related matters (d)	—			—			—			—			—			—		—			—		—
Regulatory and legal matters (e)	—			(34)			—			34			—			6		28			0.3		0.07
Tax matters (f)	—			—			—			—			(9)			(20)		11			(2.9)		0.04
Adjusted	$	3,018		$	1,701		$	311		$	1,006		$	(65)		$	121	$	820		12.8	%	$	2.14
Adjusted percent net sales	63.2		%	35.6		%	6.5		%	21.1		%	(1.4)		%	nm		17.2		%

(a) Charges represent certain acquisition and integration-related costs associated with acquisitions, including:


	Three Months
	2024		2023
Termination of sales relationships	$	1	$	—

Changes in the fair value of contingent consideration	(16)		(1)
Manufacturing integration costs	—		2

Other integration-related activities	2		5
Adjustments to Operating Income	$	(13)	$	6


Adjustments to Income Taxes	$	1	$	1
Adjustments to Net Earnings	$	(14)	$	5

(b) Structural optimization and other special charges represent the costs associated with:


	Three Months
	2024		2023
Employee retention and workforce reductions	$	(1)	$	21
Closure/transfer of manufacturing and other facilities	6		12
Product line exits	—		3
Certain long-lived and intangible asset write-offs and impairments	3		1
Other charges	6		5
Adjustments to Operating Income	$	14	$	42

Adjustments to Income Taxes	$	3	$	8
Adjustments to Net Earnings	$	11	$	34

(c) Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.

(d) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain recall-related matters.

(e) Charges represent changes in our best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within a range is not known, to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.

(f) Benefits / (charges) represent the accounting impact of certain significant and discrete tax items, including:


Dollar amounts are in millions except per share amounts or as otherwise specified.			1513


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

Nine Months 2022 Gross Profit Selling, General & Administrative Expenses Research, Development & Engineering Expenses Operating Income Other Income (Expense), Net Income Taxes Net Earnings Effective
Tax Rate Diluted EPS
Reported $ 8,342 $ 4,704 $ 1,128 $ 2,027 $ (105) $ 127 $ 1,795 6.6 % $ 4.70
Reported percent net sales 63.0 % 35.5 % 8.5 % 15.3 % (0.8) % nm 13.6 %
Acquisition and integration-related costs:
Inventory stepped-up to fair value 12 — — 12 — 3 9 — 0.02
Other acquisition and integration-related (a) — (96) — 96 — 50 46 1.9 0.12
Amortization of purchased intangible assets — — — 469 — 98 371 1.7 0.97
Structural optimization and other special charges (b) 29 (113) (87) 229 — 39 190 0.4 0.50
Medical device regulations (c) 3 — (95) 98 — 16 82 0.1 0.21
Recall-related matters (d) — — — 14 — 4 10 0.1 0.03
Regulatory and legal matters (e) — (53) — 53 — 14 39 0.3 0.10
Tax matters (f) — — — — (74) 46 (120) 3.0 (0.31)
Adjusted $ 8,386 $ 4,442 $ 946 $ 2,998 $ (179) $ 397 $ 2,422 14.1 % $ 6.34
Adjusted percent net sales 63.3 % 33.5 % 7.1 % 22.6 % (1.4) % nm 18.3 %


~~(a)~~			Charges represent certain acquisition and integration-related costs associated with acquisitions, including charges for termination of sales relationships ($2 in 2023, $16 in 2022), employee retention and workforce reductions ($3 in 2023, $29 in 2022), changes in the fair value of contingent consideration (($7) in 2023, ($132) in 2022), manufacturing integration costs ($2 in 2023, $23 in 2022), stock compensation payments upon a change in control ($0 in 2023, $132 in 2022), adjustments to acquisition-related tax provisions (charges of $28 included in Income Taxes for 2023, $0 for 2022) and other integration-related activities such as deal costs and costs associated with legal entity rationalization ($7 in 2023, $28 in 2022).
~~(b)~~			Charges represent the costs associated with employee retention and workforce reductions ($63 in 2023, $36 in 2022), the closure/transfer of manufacturing and other facilities, including site closure costs, contract termination costs and redundant employee costs during the work transfers ($36 in 2023, $62 in 2022), product line exits (primarily inventory, long-lived asset and specifically-identified intangible asset write-offs) ($16 in 2023, $7 in 2022), certain long-lived and intangible asset write-offs and impairments ($12 in 2023, $104 in 2022) and other charges ($15 in 2023, $20 in 2022).
~~(c)~~			Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union.
~~(d)~~			~~Charges represent changes in our best estimate of the minimum of the range of probable loss to resolve certain recall-related matters.~~
~~(e)~~			~~Charges represent changes in our best estimate of the minimum of the range of probable loss to resolve certain regulatory or other legal matters and the amount of favorable awards from settlements.~~
~~(f)~~			Benefits and charges represent the accounting impact of certain significant and discrete tax items, including adjustments related to the transfer of certain intellectual properties between tax jurisdictions (charges of $138 in 2023 and $138 in 2022), certain tax audit settlements (benefit of $9 included in Other Income (Expense), Net for 2023 and benefit of $24 included in Income Taxes for 2023, benefit of $45 included in Other Income (Expense) and benefit of $162 included in Income Taxes for 2022) and the reversal of deferred income tax on undistributed earnings of foreign subsidiaries ($0 for 2023, benefit of $71 for 2022).


	Three Months
	2024		2023
Adjustments related to the transfer of certain intellectual properties between tax jurisdictions	$	(47)	$	(47)
Certain tax audit settlements	—		28

Other tax matters	6		(1)
Adjustments to Income Taxes	$	(41)	$	(20)
Benefits for certain tax audit settlements	—		(9)

Adjustments to Other Income (Expense), Net	$	—	$	(9)
Adjustments to Net Earnings	$	41	$	11

FINANCIAL CONDITION AND LIQUIDITY


		Nine Months
		2023		2022
	Three Months								Three Months
Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):	2024	2023
Operating activities	Operating activities	$	2,183	$	1,621
Investing activities	Investing activities	(810)		(2,762)
Financing activities	Financing activities	(1,308)		(303)
Effect of exchange rate changes on cash and cash equivalents		(49)		(80)
Effect of exchange rate changes
Change in cash and cash equivalents	Change in cash and cash equivalents	$	16	$	(1,524)

Operating Activities

Cash provided by operating activities was ~~$2,183~~$204 and ~~$1,621~~$445 in the ~~nine~~three months ~~2023~~2024 and ~~2022.~~2023. The ~~increase~~decrease was primarily due to ~~net earnings~~the timing of payments and ~~higher accounts receivable collections.~~collections in working capital accounts.

Investing Activities

Cash used in investing activities was ~~$810~~$408 and ~~$2,762~~$132 in the ~~nine~~three months ~~2023~~2024 and ~~2022.~~2023. The ~~nine~~three months ~~2023~~2024 included cash paid for the Cerus acquisition and the nine months 2022 included cash paid for the Vocera acquisition partially offset by settlements of certain foreign currency forward contracts designated as net investment hedges.SERF acquisition. Refer to Note 7 to our Consolidated Financial Statements for further information on the ~~Cerus and Vocera acquisitions.~~SERF acquisition.

Financing Activities

Cash used in financing activities was ~~$1,308~~$418 and ~~$303~~$481 in the ~~nine~~three months ~~2023~~2024 and ~~2022.~~2023. Cash used in 2024 was primarily driven by dividend payments of $304 and cash paid for taxes on withheld shares of $113. Cash used in 2023 was primarily ~~due to~~driven by dividend payments of ~~$854, repayments~~$284 and cash paid for taxes on withheld shares of ~~$850~~$94, offset bya repayment of $100 on the term loan used to fund the acquisition of Vocera and cash paid of $121 for taxes on withheld shares, partially offset by proceeds from the issuance of €500 of floating rate senior notes. Cash used in financing activities in 2022 was primarily due to $500 of

~~payments on the $1,500 term loan used to fund the acquisition of Vocera, dividend payments of $788, net repayments of $376 on short-term borrowings and cash paid of $89 for taxes on withheld shares.~~Vocera.

We did not repurchase any shares in the ~~nine~~three months ~~2023~~2024 and ~~2022.~~2023.

Liquidity

Cash, cash equivalents and marketable securities were ~~$1,936~~$2,407 and ~~$1,928~~$3,053 on ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023. Current assets exceeded current liabilities by ~~$3,587~~$4,937 and ~~$3,972~~$4,597 on ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023. We anticipate being able to support our short-term liquidity and operating needs from a variety of sources including cash from operations, commercial paper and existing credit lines.

We have raised funds in the capital markets and have accessed the credit markets in the past and may continue to do so from time-to-time. We continue to have strong investment-grade short-term and long-term debt ratings that we believe should enable us to refinance our debt as needed.

Our cash, cash equivalents and marketable securities held in locations outside the United States was approximately ~~28%~~26% on ~~September 30, 2023~~March 31, 2024 compared to ~~36%~~25% on December 31, ~~2022.~~2023.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There were no changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for ~~2022, except as described in our Quarterly Report on Form 10-Q for the quarter ended March 31,~~ 2023.

New Accounting Pronouncements Not Yet Adopted

Refer to Note 1 to our Consolidated Financial Statements for information.


~~Dollar amounts are in millions except per share amounts or as otherwise specified.~~			16


~~STRYKER CORPORATION~~						~~2023 Third Quarter Form 10-Q~~

Guarantees and Other Off-Balance Sheet Arrangements

We do not have guarantees or other off-balance sheet financing arrangements, including variable interest entities, of a magnitude that we believe could have a material impact on our financial condition or liquidity.

OTHER MATTERS

Legal and Regulatory Matters

We are involved in various ongoing proceedings, legal actions and claims arising in the normal course of our business, including proceedings related to product, labor, intellectual property and other matters. Refer to Note 6 to our Consolidated Financial Statements for further information.

FORWARD-LOOKING STATEMENTS

This report contains statements that are not historical facts and are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current projections about operations, industry conditions, financial condition and liquidity. Words that identify forward-looking statements include, without limitation, words such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," "goal," "strategy" and words and terms of similar substance used in connection with any discussion of future operating or financial performance, an acquisition or our businesses. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Those statements are not guarantees and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results could differ materially and adversely from these forward-looking statements, historical experience or our present expectations. Some important factors that could cause our actual results to differ from our expectations in any forward-looking statements include the risks discussed in Item 1A. "Risk Factors" of our Annual Report on Form 10-K for ~~2022.~~2023. This Form 10-Q should be read in conjunction with our Consolidated Financial Statements and accompanying notes to our Consolidated Financial Statements in our Annual Report on Form 10-K for ~~2022.~~2023. While we believe that the assumptions underlying such forward-looking statements are reasonable, there can be no assurance that future events or developments will not cause such statements to be inaccurate. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement. We expressly disclaim any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that affect the likelihood that actual results will differ from those contained in the forward-looking statements.


Dollar amounts are in millions except per share amounts or as otherwise specified.			14


STRYKER CORPORATION						2024 First Quarter Form 10-Q


ITEM 3.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We consider our greatest potential area of market risk exposure to be exchange rate risk on our operating results. Quantitative and qualitative disclosures about exchange rate risk are included in Item 7A "Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K for ~~2022.~~2023. There were no material changes from the information provided therein.


ITEM 4.			CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer (the Certifying Officers), evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) on ~~September 30, 2023.~~March 31, 2024. Based on that evaluation, the Certifying Officers concluded the Company's disclosure controls and procedures were effective as of ~~September 30, 2023.~~March 31, 2024.

Changes in Internal Control Over Financial Reporting

There was no change to our internal control over financial reporting during the ~~nine~~three months ~~2023~~2024 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION


ITEM 1A.			RISK FACTORS

We are not aware of any material changes to the risk factors included in Item 1A. "Risk Factors" in our Annual Report on Form 10-K for ~~2022.~~2023.


ITEM 2.			UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS ~~AND ISSUER PURCHASES OF EQUITY SECURITIES~~

We issued 709,162 shares of our common stock in the three months ~~2023~~2024 as performance incentive awards to employees. These shares are not registered under the Securities Act of 1933 based on the conclusion that the awards would not be events of sale within the meaning of Section 2(a)(3) of the Act.

In March 2015 we announced that our Board of Directors had authorized us to purchase up to $2,000 of our common stock. The manner, timing and amount of repurchases are determined by management based on an evaluation of market conditions, stock price, and other factors and are subject to regulatory considerations. Purchases are made from time-to-time in the open market, in privately negotiated transactions or otherwise.

In the ~~nine~~three months ~~2023~~2024 we did not repurchase any shares of our common stock under our authorized repurchase program. The total dollar value of shares of our common stock that could be acquired under our authorized repurchase program was $1,033 as of ~~September 30, 2023.~~March 31, 2024.


ITEM 5.			OTHER INFORMATION

Certain of our officers or directors have made elections to participate in, and are participating in, our employee stock purchase plan and 401(k) plan and have made, and may from time to time make, elections to have shares withheld to cover withholding taxes due or pay the exercise price of stock options, restricted stock units and performance stock units, which may constitute non-Rule 10b5–1 trading arrangements (as defined in Item 408(c) of Regulation S-K).


~~Dollar amounts are in millions except per share amounts or as otherwise specified.~~			17


~~STRYKER CORPORATION~~						~~2023 Third Quarter Form 10-Q~~


ITEM 6.			EXHIBITS


31(i)			Certification of Principal Executive Officer of Stryker Corporation pursuant to Rule 13a-14(a).
31(ii)			Certification of Principal Financial Officer of Stryker Corporation pursuant to Rule 13a-14(a).
32(i)*			Certification by Principal Executive Officer of Stryker Corporation pursuant to 18 U.S.C. Section 1350.
32(ii)*			Certification by Principal Financial Officer of Stryker Corporation pursuant to 18 U.S.C. Section 1350.
101.INS			iXBRL Instance Document
101.SCH			iXBRL Schema Document
101.CAL			iXBRL Calculation Linkbase Document
101.DEF			iXBRL Definition Linkbase Document
101.LAB			iXBRL Label Linkbase Document
101.PRE			iXBRL Presentation Linkbase Document
104			Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)

			* Furnished with this Form 10-Q


Dollar amounts are in millions except per share amounts or as otherwise specified.						1815


STRYKER CORPORATION						~~2023 Third~~2024 First Quarter Form 10-Q

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		STRYKER CORPORATION
		(Registrant)


Date:	~~November 3, 2023~~May 1, 2024	/s/ KEVIN A. LOBO
		Kevin A. Lobo
		Chair, Chief Executive Officer and President


Date:	~~November 3, 2023~~May 1, 2024	/s/ GLENN S. BOEHNLEIN
		Glenn S. Boehnlein
		Vice President, Chief Financial Officer


						1916