Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SYK | ||
Entity Registrant Name | STRYKER CORP | ||
Entity Central Index Key | 310,764 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 374,642,060 | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $ 48,322,392,325 |
Consolidated Statements Of Earn
Consolidated Statements Of Earnings - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Net sales | $ 12,444 | $ 11,325 | $ 9,946 |
Cost of sales | 4,271 | 3,830 | 3,344 |
Gross profit | 8,173 | 7,495 | 6,602 |
Research, development and engineering expenses | 787 | 715 | 625 |
Selling, general and administrative expenses | 4,552 | 4,137 | 3,610 |
Recall charges, net of insurance proceeds | 173 | 158 | 296 |
Amortization of intangible assets | 371 | 319 | 210 |
Total operating expenses | 5,883 | 5,329 | 4,741 |
Operating income | 2,290 | 2,166 | 1,861 |
Other income (expense), net | (227) | (245) | (126) |
Earnings before income taxes | 2,063 | 1,921 | 1,735 |
Income taxes | 1,043 | 274 | 296 |
Net earnings | $ 1,020 | $ 1,647 | $ 1,439 |
Net earnings per share of common stock: | |||
Basic net earnings per share of common stock (in dollars per share) | $ 2.73 | $ 4.40 | $ 3.82 |
Diluted net earnings per share of common stock (in dollars per share) | $ 2.68 | $ 4.35 | $ 3.78 |
Weighted-average shares outstanding: | |||
Basic (in shares) | 374 | 374.1 | 376.6 |
Effect of dilutive employee stock options (in shares) | 6.1 | 4.4 | 4.3 |
Diluted (in shares) | 380.1 | 378.5 | 380.9 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 1,020 | $ 1,647 | $ 1,439 |
Other comprehensive income (loss), net of tax | |||
Marketable securities | (4) | 0 | (3) |
Pension plans | (2) | (13) | 17 |
Unrealized gains (losses) on designated hedges | 4 | 20 | (9) |
Financial statement translation | 210 | (129) | (390) |
Total other comprehensive income (loss), net of tax | 208 | (122) | (385) |
Comprehensive income | $ 1,228 | $ 1,525 | $ 1,054 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 2,542 | $ 3,316 |
Marketable securities | 251 | 68 |
Accounts receivable, less allowance of $59 ($56 in 2016) | 2,198 | 1,967 |
Inventories: | ||
Materials and supplies | 528 | 425 |
Work in process | 148 | 130 |
Finished goods | 1,789 | 1,475 |
Total inventories | 2,465 | 2,030 |
Prepaid expenses and other current assets | 537 | 480 |
Total current assets | 7,993 | 7,861 |
Property, plant and equipment: | ||
Land, buildings and improvements | 936 | 820 |
Machinery and equipment | 2,864 | 2,341 |
Total property, plant and equipment | 3,800 | 3,161 |
Less allowance for depreciation | 1,825 | 1,592 |
Property, plant and equipment, net | 1,975 | 1,569 |
Goodwill | 7,168 | 6,356 |
Other intangibles, net | 3,477 | 3,508 |
Other noncurrent assets | 1,584 | 1,141 |
Total assets | 22,197 | 20,435 |
Current liabilities | ||
Accounts payable | 487 | 437 |
Accrued compensation | 838 | 767 |
Income taxes | 143 | 40 |
Dividend payable | 178 | 159 |
Accrued recall expenses | 196 | 594 |
Accrued expenses and other liabilities | 1,011 | 923 |
Current maturities of debt | 632 | 228 |
Total current liabilities | 3,485 | 3,148 |
Long-term debt, excluding current maturities | 6,590 | 6,686 |
Accrued Income Taxes, Noncurrent | 1,261 | 287 |
Other noncurrent liabilities | 881 | 764 |
Liabilities | 12,217 | 10,885 |
Shareholders' equity | ||
Common stock, $0.10 par value | 37 | 37 |
Additional paid-in capital | 1,496 | 1,432 |
Retained earnings | 8,986 | 8,842 |
Accumulated other comprehensive loss | (553) | (761) |
Total Stryker shareholders' equity | 9,966 | 9,550 |
Noncontrolling interest | 14 | 0 |
Total shareholders' equity | 9,980 | 9,550 |
Total liabilities & shareholders' equity | 22,197 | 20,435 |
Non-controlling interest | ||
Shareholders' equity | ||
Total shareholders' equity | $ 14 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 59 | $ 56 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common Stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 |
Common Stock, Shares, Outstanding | 374,400,000 | 374,600,000 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Total Stryker shareholders' equity | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling interest |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 0 | ||||||
Balance at beginning of period at Dec. 31, 2014 | $ 38 | $ 1,252 | $ 7,559 | $ (254) | |||
Beginning balance, shares at Dec. 31, 2014 | 378.6 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under stock option and benefit plans | 8 | ||||||
Issuance of common stock under stock option and benefit plans, shares | 1.8 | ||||||
Repurchase of common stock | (1) | (25) | (674) | ||||
Repurchase of common stock, shares | (7.4) | ||||||
Share-based compensation | 86 | ||||||
Net earnings | $ 1,439 | 1,439 | 0 | ||||
Cash dividends declared | (532) | ||||||
Other comprehensive income (loss) | $ (385) | (385) | |||||
Balance at end of period at Dec. 31, 2015 | $ 8,511 | 37 | 1,321 | 7,792 | (639) | ||
Ending balance, shares at Dec. 31, 2015 | 373 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 8,511 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Acquisitions | 0 | ||||||
Interest purchased | 0 | ||||||
Foreign currency exchange translation adjustment | 0 | ||||||
Issuance of common stock under stock option and benefit plans | 15 | ||||||
Issuance of common stock under stock option and benefit plans, shares | 1.7 | ||||||
Repurchase of common stock | (1) | (12) | |||||
Repurchase of common stock, shares | (0.1) | ||||||
Share-based compensation | 97 | ||||||
Net earnings | $ 1,647 | 1,647 | 0 | ||||
Cash dividends declared | (585) | ||||||
Other comprehensive income (loss) | (122) | (122) | |||||
Balance at end of period at Dec. 31, 2016 | $ 9,550 | 9,550 | 37 | 1,432 | 8,842 | (761) | |
Ending balance, shares at Dec. 31, 2016 | 374.6 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 9,550 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Acquisitions | 0 | ||||||
Interest purchased | 0 | ||||||
Foreign currency exchange translation adjustment | 0 | ||||||
Issuance of common stock under stock option and benefit plans | 0 | (42) | |||||
Issuance of common stock under stock option and benefit plans, shares | 1.7 | ||||||
Repurchase of common stock | $ (230) | 0 | (7) | (223) | |||
Repurchase of common stock, shares | (1.9) | ||||||
Share-based compensation | 113 | ||||||
Net earnings | $ 1,020 | 1,020 | 0 | ||||
Cash dividends declared | (653) | ||||||
Other comprehensive income (loss) | 208 | 208 | |||||
Balance at end of period at Dec. 31, 2017 | $ 9,966 | $ 9,966 | $ 37 | $ 1,496 | $ 8,986 | $ (553) | |
Ending balance, shares at Dec. 31, 2017 | 374.4 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 9,980 | 14 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Acquisitions | 114 | ||||||
Interest purchased | (99) | ||||||
Foreign currency exchange translation adjustment | $ (1) |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | |||
Net earnings | $ 1,020 | $ 1,647 | $ 1,439 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation | 271 | 227 | 187 |
Amortization of intangible assets | 371 | 319 | 210 |
Share-based compensation | 113 | 97 | 86 |
Recall charges | 173 | 158 | 349 |
Sale of inventory stepped up to fair value at acquisition | 22 | 36 | 7 |
Deferred income tax benefit (expense) | 36 | (46) | 87 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (162) | (192) | (151) |
Inventories | (320) | (299) | (115) |
Accounts payable | 21 | (16) | 35 |
Accrued expenses and other liabilities | 90 | 241 | 129 |
Recall-related payments | (526) | (190) | (1,206) |
Income taxes | 704 | (128) | (238) |
Other, net | (254) | 61 | 162 |
Net cash provided by operating activities | 1,559 | 1,915 | 981 |
Investing activities | |||
Acquisitions, net of cash acquired | (831) | (4,332) | (153) |
Purchases of marketable securities | (270) | (151) | (1,715) |
Proceeds from sales of marketable securities | 87 | 785 | 4,094 |
Purchases of property, plant and equipment | (598) | (490) | (270) |
Other investing, net | (1) | (3) | 0 |
Net cash (used in) provided by investing activities | (1,613) | (4,191) | 1,956 |
Financing activities | |||
Proceeds from borrowings | 733 | 1,094 | 1,576 |
Payments on borrowings | (933) | (1,635) | (2,272) |
Proceeds from issuance of long-term debt, net | 499 | 3,453 | 744 |
Dividends paid | (636) | (568) | (521) |
Repurchase of common stock | (230) | (13) | (700) |
Cash paid for taxes from withheld shares | (95) | (67) | (56) |
Payments to purchase noncontrolling interest | (99) | 0 | 0 |
Other financing, net | (33) | (6) | 6 |
Net cash (used in) provided by financing activities | (794) | 2,258 | (1,223) |
Effect of exchange rate changes on cash and cash equivalents | 74 | (45) | (130) |
Change in cash and cash equivalents | (774) | (63) | 1,584 |
Cash and cash equivalents at beginning of year | 3,316 | 3,379 | 1,795 |
Cash and cash equivalents at end of year | 2,542 | 3,316 | 3,379 |
Supplemental cash flow disclosure: | |||
Cash paid for income taxes, net of refunds | 312 | 510 | 497 |
Cash paid for interest on debt | $ 264 | $ 180 | $ 101 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Nature of Operations: Stryker Corporation (the "Company," "we," "us," or "our") is one of the world's leading medical technology companies and, together with its customers, is driven to make healthcare better. The Company offers innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that improve patient and hospital outcomes. Our products include implants used in joint replacement and trauma surgeries; surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling, emergency medical equipment and intensive care disposable products; neurosurgical, neurovascular and spinal devices; as well as other products used in a variety of medical specialties. Basis of Presentation and Consolidation: The Consolidated Financial Statements include the Company and its subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. We have no material interests in variable interest entities and none that require consolidation. Certain prior year amounts have been reclassified to conform to the presentation of our Consolidated Financial Statements in 2017 . Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of net sales and expenses in the reporting period. Actual results could differ from those estimates. Revenue Recognition: Sales are recognized when revenue is realized or realizable and has been earned. Our policy is to recognize revenue when title to the product, ownership and risk of loss transfer to the customer, which can be on the date of shipment, the date of receipt by the customer or, for most Orthopaedics products, when we receive appropriate notification that the product has been used or implanted. A provision for estimated sales returns, discounts, rebates and other sales incentives is recorded as a reduction of net sales in the same period that the revenue is recognized. Shipping and handling costs charged to customers are included in net sales. Cost of Sales: Cost of sales is primarily comprised of direct materials and supplies consumed in the manufacture of product, as well as manufacturing labor, depreciation expense and direct overhead expense necessary to acquire and convert the purchased materials and supplies into finished product. Cost of sales also includes the cost to distribute products to customers, inbound freight costs, warehousing costs and other shipping and handling activity. Research, Development and Engineering Expenses: Research and development costs are charged to expense as incurred. Costs include research, development and engineering activities relating to the development of new products, improvement of existing products, technical support of products and compliance with governmental regulations for the protection of customers and patients. Costs primarily consist of salaries, wages, consulting and depreciation and maintenance of research facilities and equipment. Selling, General and Administrative Expenses: Selling, general and administrative expense is primarily comprised of selling expenses, marketing expenses, administrative and other indirect overhead costs, amortization of loaner instrumentation, depreciation and amortization expense of non-manufacturing assets and other miscellaneous operating items. Currency Translation: Financial statements of subsidiaries outside the United States generally are measured using the local currency as the functional currency. Adjustments to translate those statements into United States Dollars are recorded in other comprehensive income (OCI). Transactional exchange gains and losses are included in earnings. Cash Equivalents: Highly liquid investments with remaining stated maturities of three months or less when purchased are considered cash equivalents and recorded at cost. Marketable Securities: Marketable securities consist of marketable debt securities, certificates of deposit and mutual funds. Mutual funds are acquired to offset changes in certain liabilities related to deferred compensation arrangements and are expected to be used to settle these liabilities. Pursuant to our investment policy, all individual marketable security investments must have a minimum credit quality of single A (Standard & Poor’s and Fitch) and A2 (Moody’s Corporation) at the time of acquisition, while the overall portfolio of marketable securities must maintain a minimum average credit quality of double A (Standard & Poor’s and Fitch) or Aa (Moody’s Corporation). In the event of a rating downgrade below the minimum credit quality subsequent to purchase, the marketable security investment is evaluated to determine the appropriate action to take to minimize the overall risk to our marketable security investment portfolio. Our marketable securities are classified as available-for-sale and trading securities. Investments in trading securities represent participant-directed investments of deferred employee compensation. Accounts Receivable: Accounts receivable consists of trade and other miscellaneous receivables. An allowance is maintained for doubtful accounts for estimated losses in the collection of accounts receivable. Estimates are made regarding the ability of customers to make required payments based on historical credit experience and expected future trends. Accounts receivable are written off when all reasonable collection efforts are exhausted. Inventories: Inventories are stated at the lower of cost or market, with cost generally determined using the first-in, first-out (FIFO) cost method. For excess and obsolete inventory resulting from the potential inability to sell specific products at prices in excess of current carrying costs, reserves are maintained to reduce current carrying cost to market prices. Financial Instruments: Our financial instruments consist of cash, cash equivalents, marketable securities, accounts receivable, other investments, accounts payable, debt and foreign currency exchange contracts. The carrying value of our financial instruments, with the exception of our senior unsecured notes, approximates fair value on December 31, 2017 and 2016 . Refer to Note 2 and 9 for further details. All marketable securities are recognized at fair value. Adjustments to the fair value of marketable securities that are classified as available-for-sale are recorded as increases or decreases, net of income taxes, within accumulated other comprehensive income (AOCI) in shareholders’ equity and adjustments to the fair value of marketable securities that are classified as trading are recorded in earnings. The amortized cost of marketable debt securities is adjusted for amortization of premiums and discounts to maturity computed under the effective interest method. Such amortization and interest and realized gains and losses are included in other income (expense), net. The cost of securities sold is determined by the specific identification method. We review declines in the fair value of our investments classified as available-for-sale to determine whether the decline in fair value is an other-than-temporary impairment. The resulting losses from other-than-temporary impairments of available-for-sale marketable securities are included in earnings. Derivatives: All derivatives are recognized at fair value and reported on a gross basis. We enter into forward currency exchange contracts to mitigate the impact of currency fluctuations on transactions denominated in nonfunctional currencies, thereby limiting our risk that would otherwise result from changes in exchange rates. The periods of the forward currency exchange contracts correspond to the periods of the exposed transactions, with realized gains and losses included in the measurement and recording of transactions denominated in the nonfunctional currencies. All forward currency exchange contracts are recorded at their fair value each period. Forward currency exchange contracts designated as cash flow hedges are designed to hedge the variability of cash flows associated with forecasted transactions denominated in a foreign currency that will take place in the future. These nonfunctional currency exposures principally relate to forecasted intercompany purchases of manufactured products and generally have maturities up to eighteen months. Changes in value of derivatives designated as cash flow hedges are recorded in AOCI on the Consolidated Balance Sheets until earnings are affected by the variability of the underlying cash flows. At that time, the applicable amount of gain or loss from the derivative instrument that is deferred in shareholders’ equity is reclassified into earnings and is included in other income (expense), net or cost of goods sold in the Consolidated Statements of Earnings, depending on the underlying transaction that is being hedged. Cash flows associated with these hedges are included in cash from operations in the same category as the cash flows from the items being hedged. Derivative forward contracts are used to offset our exposure to the change in value of specific foreign currency denominated assets and liabilities, primarily intercompany payables and receivables. These derivatives are not designated as hedges and, therefore, changes in the value of these forward contracts are recognized in earnings, thereby offsetting the current earnings effect of the related changes in value of foreign currency denominated assets and liabilities. The estimated fair value of our forward currency exchange contracts represents the measurement of the contracts at month-end spot rates as adjusted by current forward points. We designated certain long-term intercompany loans payable and forward exchange contracts as net investment hedges of our investments in certain international subsidiaries that use the Euro as their functional currency. For derivative instruments that are designated and qualify as a net investment hedge, the effective portion of the derivative's gain or loss is recognized in OCI and reported as a component of AOCI. We use the forward method to measure ineffectiveness. Under this method the change in the carrying value of the Euro-denominated amounts due to remeasurement of the effective portion is reported as a component of AOCI. The remaining change in the carrying value of the ineffective portion, if any, is recognized in other income (expense), net. The gain or loss related to settled net investment hedges will be subsequently reclassified into net earnings when the hedged net investment is either sold or substantially liquidated. Forward starting interest rate derivative instruments designated as cash flow hedges are used to manage the exposure to interest rate volatility with regard to future issuance and refinancing of debt. The effective portion of the gain or loss on a forward starting interest rate derivative instrument that is designated and qualifies as a cash flow hedge is reported as a component of AOCI. Beginning in the period in which the debt refinancing occurs and the related derivative instruments is terminated, the effective portion of the gains or losses is then reclassified into interest expense over the term of the related debt. Interest rate derivative instruments designated as fair value hedges are being used to manage the exposure to interest rate movements and to reduce borrowing costs by converting fixed-rate debt into floating-rate debt. Under these agreements, we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. Property, Plant and Equipment: Property, plant and equipment is stated at cost. Depreciation is generally computed by the straight-line method over the estimated useful lives of three to 30 years for buildings and improvements and three to 10 years for machinery and equipment. Goodwill and Other Intangible Assets: Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses at the acquisition date, after amounts allocated to other identifiable intangible assets. Factors that contribute to the recognition of goodwill include synergies that are specific to our business and not available to other market participants and are expected to increase net sales and profits; acquisition of a talented workforce; cost savings opportunities; the strategic benefit of expanding our presence in core and adjacent markets; and diversifying our product portfolio. The fair values of other identifiable intangible assets are primarily determined using the income approach. Other intangible assets include, but are not limited to, developed technology, customer and distributor relationships (which reflect expected continued customer or distributor patronage) and trademarks and patents. Intangible assets with determinable useful lives are amortized on a straight-line basis over their estimated useful lives of four to 40 years. Certain acquired trade names are considered to have indefinite lives and are not amortized, but are assessed annually for potential impairment as described below. In some of our acquisitions, we acquire in-process research and development (IPRD), which is an indefinite-lived intangible asset. IPRD where research has been completed becomes a determinable-lived intangible asset and IPRD determined to have no future use becomes impaired. Goodwill, Intangibles and Long-Lived Asset Impairment Tests: We perform our annual impairment test for goodwill in the fourth quarter of each year. We consider qualitative indicators of the fair value of a reporting unit when it is unlikely that a reporting unit has impaired goodwill. In certain circumstances, we may also utilize a discounted cash flow analysis that requires certain assumptions and estimates be made regarding market conditions and our future profitability. Indefinite-lived intangible assets are also tested at least annually for impairment by comparing the individual carrying values to the fair value. We review long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows. Undiscounted cash flows expected to be generated by the related assets are estimated over the asset's useful life based on updated projections. If the evaluation indicates that the carrying amount of the asset may not be recoverable, any potential impairment is measured based upon the fair value of the related asset or asset group as determined by an appropriate market appraisal or other valuation technique. Assets classified as held for sale are recorded at the lower of carrying amount or fair value less costs to sell. Share-Based Compensation: We use share based compensation in the form of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PSUs). Stock options are granted under long-term incentive plans to certain key employees and non-employee directors at an exercise price not less than the fair market value of the underlying common stock, which is the quoted closing price of our common stock on the day prior to the date of grant. The options are granted for periods of up to 10 years and become exercisable in varying installments. We grant RSUs to key employees and non-employee directors and PSUs to certain key employees under our long-term incentive plans. The fair value of RSUs is determined based on the number of shares granted and the quoted closing price of our common stock on the date of grant, adjusted for the fact that RSUs do not include anticipated dividends. RSUs generally vest in one-third increments over a three -year period and are settled in stock. PSUs are earned over a three -year performance cycle and vest in March of the year following the end of that performance cycle. The number of PSUs that will ultimately be earned is based on our performance relative to pre-established goals in that three -year performance cycle. The fair value of PSUs is determined based on the quoted closing price of our common stock on the day of grant. Compensation expense is recognized in the Consolidated Statements of Earnings based on the estimated fair value of the awards on the grant date. Compensation expense recognized reflects an estimate of the number of awards expected to vest after taking into consideration an estimate of award forfeitures based on actual experience and is recognized on a straight-line basis over the requisite service period, which is generally the period required to obtain full vesting. Management expectations related to the achievement of performance goals associated with PSU grants is assessed regularly and that assessment is used to determine whether PSU grants are expected to vest. If performance-based milestones related to PSU grants are not met or not expected to be met, any compensation expense recognized associated with such grants will be reversed. Income Taxes: Deferred income tax assets and liabilities are determined based on differences between financial reporting and income tax bases of assets and liabilities and are measured using the enacted income tax rates in effect for the years in which the differences are expected to reverse. Deferred income tax benefits generally represent the change in net deferred income tax assets and liabilities in the year. Other amounts result from adjustments related to acquisitions and foreign currency as appropriate. We operate in multiple income tax jurisdictions both within the United States and internationally. Accordingly, management must determine the appropriate allocation of income to each of these jurisdictions based on current interpretations of complex income tax regulations. Income tax authorities in these jurisdictions regularly perform audits of our income tax filings. Income tax audits associated with the allocation of this income and other complex issues, including inventory transfer pricing and cost sharing, product royalty and foreign branch arrangements, may require an extended period of time to resolve and may result in significant income tax adjustments if changes to the income allocation are required between jurisdictions with different income tax rates. New Accounting Pronouncements Not Yet Adopted In August 2017 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities, which amends and simplifies hedge accounting guidance, as well as improves presentation and disclosure to align the economic effects of risk management strategies in the financial statements. The update is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. Early adoption is permitted. We have performed a preliminary assessment of the impact from this update and do not expect the adoption of this standard to have a material impact on our Consolidated Financial Statements. We are currently evaluating our timing of adopting this standard. In May 2017 the FASB issued ASU 2017-09, Compensation - Stock Compensation, which revises the guidance related to changes in terms or conditions of a share-based payment award. We plan to adopt this update on January 1, 2018 and do not expect the adoption to have a material impact on our Consolidated Financial Statements. In March 2017 the FASB issued ASU 2017-07, Compensation - Retirement Benefits, which revises the recognition and presentation of the elements of net pension benefit costs. We plan to adopt this update on January 1, 2018 and do not expect the adoption to have a material impact on our Consolidated Financial Statements. In February 2016 the FASB issued ASU 2016-02, Leases. This update requires an entity to recognize assets and liabilities on the balance sheet for leases with terms greater than 12 months. We are in the process of evaluating the impact on our Consolidated Financial Statements and anticipate most of our current operating leases, as well as some service contracts, will result in the recognition of right to use assets and corresponding lease liabilities in our Consolidated Balance Sheets. We also anticipate changes in classification between financial statement line items in our Consolidated Statements of Earnings and Consolidated Statements of Cash Flows, but do not anticipate adoption of the update will have a material impact on net earnings and cash flows. We plan to adopt this update on January 1, 2019. In October 2016 the FASB issued ASU 2016-16, Income Taxes, Intra-Entity Transfers of Assets Other Than Inventory, which requires companies to account for the income tax effect of intercompany sales and transfers of assets other than inventory when the transfer occurs. Under current guidance, we defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized. We will adopt this update on January 1, 2018. We have finalized our assessment of the impact from this update and have recorded a cumulative-effect adjustment to decrease retained earnings in the amount of approximately $696 as of January 1, 2018. In May 2014 the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This update outlines a single, comprehensive model for accounting for revenue from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We plan to adopt this update on January 1, 2018 using the modified retrospective approach by recognizing the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings for 2018. We have finalized our assessment of the impact from this update and have recorded a cumulative-effect adjustment to decrease retained earnings in the amount of $55 as of January 1, 2018. We expect the impact from adoption of this standard will be recognized in our Consolidated Statements of Earnings in 2018. Accounting Pronouncements Recently Adopted On January 1, 2017 we adopted ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The impact on our Consolidated Statements of Earnings in 2017 was a tax benefit of $57 . In our prior year Consolidated Statements of Cash Flow we reclassified $36 from other financing to income taxes within operating activities to conform to current year presentation. On January 1, 2017 we adopted ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. The adoption of this update did not have a material impact on our Consolidated Financial Statements. No other new accounting pronouncements were issued or became effective in the period that had, or are expected to have, a material impact on our Consolidated Financial Statements. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified in their entirety based on the lowest level of input and disclosed in one of the following three categories: Level 1 Quoted market prices in active markets for identical assets or liabilities. Level 2 Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 Unobservable inputs reflecting our assumptions or external inputs from active markets. Use of observable market data, when available, is required in making fair value measurements. When inputs used fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. We determine fair value for Level 1 instruments using exchange-traded prices for identical instruments. We determine fair value of Level 2 instruments using exchange-traded prices of similar instruments, where available, or utilizing other observable inputs that take into account our credit risk and that of our counterparties. Foreign currency exchange contracts and interest rate hedges are included in Level 2 and we use inputs other than quoted prices that are observable for the asset or liability. The Level 2 derivative instruments are primarily valued using standard calculations and models that use readily observable market data as their basis. Our Level 3 liabilities are comprised of contingent consideration arising from recently completed acquisitions. We determine fair value of these Level 3 liabilities using a discounted cash flow technique or the Black-Scholes option pricing model. Significant unobservable inputs were used in our assessment of fair value, including assumptions regarding future business results, discount rates, discount periods and probability assessments based on likelihood of reaching various targets. We remeasure the fair value of our assets and liabilities each reporting period. We record the changes in fair value within selling, general and administrative expense and the changes in the time value of money within other income (expense), net. Assets Measured at Fair Value 2017 2016 Cash and cash equivalents $ 2,542 $ 3,316 Trading marketable securities 121 94 Level 1 - Assets $ 2,663 $ 3,410 Available-for-sale marketable securities: Corporate and asset-backed debt securities $ 125 $ 25 Foreign government debt securities 2 — United States agency debt securities 27 9 United States treasury debt securities 70 16 Certificates of deposit 27 18 Total available-for-sale marketable securities $ 251 $ 68 Foreign currency exchange forward contracts 15 45 Interest rate swap asset 49 57 Level 2 - Assets $ 315 $ 170 Total assets measured at fair value $ 2,978 $ 3,580 Liabilities Measured at Fair Value 2017 2016 Deferred compensation arrangements $ 121 $ 94 Level 1 - Liabilities $ 121 $ 94 Foreign currency exchange forward contracts $ 37 $ 18 Level 2 - Liabilities $ 37 $ 18 Contingent consideration: Beginning $ 86 $ 56 Additions 3 49 Change in estimate 2 (7 ) Settlements (59 ) (12 ) Ending $ 32 $ 86 Level 3 - Liabilities $ 32 $ 86 Total liabilities measured at fair value $ 190 $ 198 Fair Value of Available for Sale Securities by Maturity 2017 2016 Due in one year or less $ 107 $ 36 Due after one year through three years $ 144 $ 32 On December 31, 2017 the aggregate difference between the cost and fair value of available-for-sale marketable securities was nominal. Interest receivable was $1 and less than $1 in 2017 and 2016 related to our marketable security portfolio. Interest and marketable securities income was $60 , $29 , and $14 in 2017 , 2016 , and 2015 , 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. We do not consider these investments to be other-than-temporarily impaired on December 31, 2017 . On December 31, 2017 substantially all our investments with unrealized losses that were not deemed to be other-than-temporarily impaired were in a continuous unrealized loss position for less than twelve months, and the losses were nominal. Securities in a Continuous Unrealized Loss Position Number of Investments Fair Value Corporate and Asset-Backed 118 $ 108 Foreign government 1 2 United States Agency 15 20 United States Treasury 20 70 Certificate of Deposit 28 23 Total 182 $ 223 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Foreign Currency Hedges We use operational and economic hedges, foreign currency exchange forward contracts, net investment hedges (both long-term intercompany loans payable and forward exchange contracts) and interest rate derivative instruments to manage the impact of currency exchange and interest rate fluctuations on earnings and cash flow. We do not enter into derivative instruments for speculative purposes. We are exposed to 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 exposure to loss is the asset balance of the instrument. 2017 Designated Non-Designated Total Gross notional amount $ 1,104 $ 4,767 $ 5,871 Maximum term in days 548 Fair value: Other current assets $ 11 $ 4 $ 15 Other noncurrent assets 1 — 1 Other current liabilities (7 ) (29 ) (36 ) Other noncurrent liabilities (1 ) — (1 ) Total fair value $ 4 $ (25 ) $ (21 ) 2016 Gross notional amount $ 1,058 $ 2,841 $ 3,899 Maximum term in days 548 Fair value: Other current assets $ 24 $ 17 $ 41 Other noncurrent assets 4 — 4 Other current liabilities (9 ) (7 ) (16 ) Other noncurrent liabilities (2 ) — (2 ) Total fair value $ 17 $ 10 $ 27 On December 31, 2017 the total after-tax amount in AOCI related to our designated net investment hedges was $30 . We evaluate the effectiveness of our net investment hedges quarterly. We have not recognized any ineffectiveness in 2017 . Net Currency Exchange Rate Gains (Losses) Recorded in: 2017 2016 2015 Cost of sales $ (6 ) $ — $ 19 Other income (expense), net (9 ) (19 ) (22 ) Total $ (15 ) $ (19 ) $ (3 ) On December 31, 2017 pretax gains recorded in AOCI on derivatives designated as hedges that are expected to be reclassified to earnings within 12 months of the balance sheet date were $7 compared with less than $1 on December 31, 2016 . This reclassification is primarily due to the sale of inventory that includes previously hedged purchases. There were de minimis ineffective portions of derivatives, which are included in the table above. Interest Rate Hedges On December 31, 2017 we had interest rate swaps with notional amounts of $600 designated as forward starting interest rate swaps in anticipation of future debt issuances. The market value of outstanding interest rate swap agreements on December 31, 2017 was $44 , which was recorded in other current assets with an offsetting amount recorded in AOCI. Upon the probable issuance of the debt, these amounts will be released to interest expense over the term of the debt. The cash flow effect of this hedge is recorded in cash flow from operations. On December 31, 2017 we had interest rate swaps with gross notional amounts of $500 designated as fair value hedges of underlying fixed rate obligations representing a portion of our $600 senior unsecured notes due in 2024. There was no hedge ineffectiveness recorded as a result of these fair value hedges in 2017 . Fair Value Interest Rate Hedge Instruments 2017 2016 Gross notional amount $ 500 $ 500 Fair value: Other noncurrent assets 5 9 Long-term debt (5 ) (9 ) Total $ — $ — |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income (AOCI) Accumulated Other Comprehensive (Loss) Income (AOCI) | 12 Months Ended |
Dec. 31, 2017 | |
Reclassification Adjustments Out of Accumulated Other Comprehensive Income (AOCI) [Abstract] | |
Accumulated Other Comprehensive (Loss) Income (AOCI) | ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (AOCI) Marketable Securities Pension Plans Hedges Financial Statement Translation Total 2015 $ — $ (119 ) $ 4 $ (524 ) $ (639 ) OCI 3 (20 ) 35 (112 ) (94 ) Income taxes (1 ) 3 (15 ) (17 ) (30 ) Reclassifications to: Cost of Sales — 6 — — 6 Other income (3 ) — — — (3 ) Income taxes 1 (2 ) — — (1 ) Net OCI — (13 ) 20 (129 ) (122 ) 2016 $ — $ (132 ) $ 24 $ (653 ) $ (761 ) OCI (7 ) (27 ) (4 ) 163 125 Income taxes 1 19 4 47 71 Reclassifications to: Cost of Sales — 8 6 — 14 Other Income 2 — — — 2 Income taxes — (2 ) (2 ) — (4 ) Net OCI (4 ) (2 ) 4 210 208 2017 $ (4 ) $ (134 ) $ 28 $ (443 ) $ (553 ) |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS In 2017 and 2016 total cash paid for acquisitions was $831 and $4,332 . We acquired stock in companies and various assets that continue to support our capital deployment and product development strategies. In December 2017 we announced a definitive merger agreement to acquire Entellus Medical, Inc. (Entellus), a high-growth global medical technology company focused on delivering superior patient and physician experiences through products designed for the minimally invasive treatment of various ear, nose and throat (ENT) disease states, for $24.00 per share, or total consideration of approximately $662 . Entellus, which had net sales of approximately $75 in 2016, will be integrated into the Instruments business within MedSurg. We expect the acquisition to close in February 2018. In September 2017 we completed the acquisition of NOVADAQ Technologies Inc. (NOVADAQ) for total consideration of approximately $716 . NOVADAQ is a leading developer of fluorescence imaging technology that provides surgeons with visualization of blood flow in vessels and related tissue perfusion in cardiac, cardiovascular, gastrointestinal, plastic, microsurgical, and reconstructive procedures. This acquisition enhances product offerings within our MedSurg segment. Goodwill related to the NOVADAQ acquisition is not deductible for tax purposes. Purchase Price Allocation of Acquired Net Assets 2017 2016 NOVADAQ Sage Physio Purchase price paid $ 716 $ 2,870 $ 1,299 Contingent consideration — 5 — Total consideration $ 716 $ 2,875 $ 1,299 Tangible assets acquired: Cash 42 91 32 Accounts receivable 11 29 107 Inventory 39 63 61 Other assets 9 80 103 Liabilities (58 ) (83 ) (364 ) Intangible assets: Customer relationship 18 930 344 Trade name 1 70 160 Developed technology and patents 133 173 226 IPRD — — 7 Goodwill 521 1,522 623 $ 716 $ 2,875 $ 1,299 Weighted average life of intangible assets 14 15 14 Purchase price allocations for NOVADAQ and other acquisitions in 2017 and 2016 were based on preliminary valuations. Our estimates and assumptions are subject to change within the measurement period. The purchase price allocation for the acquisitions of Sage Products, LLC (Sage) and Physio-Control International, Inc. (Physio) was finalized in 2017. Goodwill related to the Sage acquisition is deductible for tax purposes. |
Contingencies and Commitments
Contingencies and Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | 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 that 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 product liability 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 June 2012 we voluntarily recalled our Rejuvenate and ABG II Modular-Neck hip stems and terminated global distribution of these hip products. Product liability lawsuits relating to this voluntary recall have been filed against us. On November 3, 2014 we announced that we had entered into a settlement agreement to compensate eligible United States patients who had revision surgery to replace their Rejuvenate and/or ABG II Modular-Neck hip stem prior to that date and in December 2016 the settlement program was extended to patients who had revision surgery prior to December 19, 2016. We continue to offer support for recall-related care and reimburse patients who are not eligible to enroll in the settlement program for testing and treatment services, including any necessary revision surgeries. In addition, some lawsuits will remain and we will continue to defend against them. Based on the information that has been received, the actuarially determined range of probable loss to resolve this matter globally is currently estimated to be approximately $2,072 to $2,307 ( $2,304 to $2,539 before $232 of third-party insurance recoveries). We recorded additional charges to earnings of $104 in 2017 , representing the excess of the minimum of the range over the previously recorded reserves. The final outcome of this matter is dependent on many factors that are difficult to predict including the number of enrollees in the settlement program and the total awards to them, the number and costs of patients not eligible for the settlement program who seek testing and treatment services and require revision surgery and the number and actual costs to resolve the remaining lawsuits. Accordingly, the ultimate cost to resolve this entire matter globally may be materially different than the amount of the current estimate and accruals and could have a material adverse effect on our financial position, results of operations and cash flows. In 2010 we filed a lawsuit in federal court against Zimmer Biomet Holdings, Inc. (Zimmer), alleging that a Zimmer product infringed on three of our patents. In 2013 following a jury trial favorable to us, the trial judge entered a final judgment that, among other things, awarded us damages of $76 and ordered Zimmer to pay us enhanced damages. Zimmer appealed this ruling. In December 2014 the Federal Circuit affirmed the damages awarded to us, reversed the order for enhanced damages and remanded the issue of attorney fees to the trial court. In May 2015 the trial court entered a stipulated judgment that, among other things, required Zimmer to pay us the base amount of damages and interest, while the issues of enhanced damages and attorney fees continue to be pursued. In June 2015 we recorded a $54 gain, net of legal costs, which was recorded within selling, general and administrative expenses. On June 13, 2016 the United States Supreme Court vacated the decision of the Federal Circuit that reversed our judgment for enhanced damages and remanded the case to the Federal Circuit to reconsider the issue. On September 12, 2016 the Federal Circuit issued an opinion that, among other things, remanded the issue of enhanced damages to the trial court. On July 12, 2017 the trial court reaffirmed its award of enhanced damages and entered a judgment of $164 in our favor. On July 24, 2017 Zimmer filed a notice of appeal of this decision. Future Obligations We have purchase commitments for materials, supplies, services and property, plant and equipment as part of the normal course of business. In addition, we lease various manufacturing, warehousing and distribution facilities, administrative and sales offices as well as equipment under operating leases. Rent expense totaled $125 , $112 , and $101 in 2017 , 2016 and 2015 . Refer to Note 9 for more information on the debt obligations. Future Obligations 2018 2019 2020 2021 2022 Thereafter Debt repayments $ 600 $ 1,250 $ 500 $ 750 $ — $ 4,150 Purchase obligations $ 1,046 $ 95 $ 2 $ 1 $ — $ — Minimum lease payments $ 106 $ 63 $ 45 $ 31 $ 21 $ 60 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | GOODWILL AND OTHER INTANGIBLE ASSETS We completed our annual impairment tests of goodwill in 2017 and 2016 and concluded in each year that no impairments exist. Summary of Other Intangible Assets Weighted Average Amortization Period (Years) Gross Less Net Developed technologies 2017 12 $ 2,416 $ 917 $ 1,499 2016 14 2,091 706 1,385 Customer relationships 2017 15 $ 2,088 $ 561 $ 1,527 2016 15 2,049 407 1,642 Patents 2017 10 $ 340 $ 227 $ 113 2016 11 317 206 111 Trademarks 2017 18 $ 352 $ 84 $ 268 2016 18 348 59 289 In-process research and development 2017 N/A $ 25 — $ 25 2016 N/A 30 — 30 Other 2017 9 $ 93 $ 48 $ 45 2016 12 115 64 51 Total 2017 14 $ 5,314 $ 1,837 $ 3,477 2016 15 $ 4,950 $ 1,442 $ 3,508 Changes in the Net Carrying Value of Goodwill by Segment Orthopaedics MedSurg Neurotechnology and Spine Total 2015 $ 2,344 $ 782 $ 1,010 $ 4,136 Additions and adjustments 72 2,196 62 2,330 Foreign exchange (44 ) (44 ) (22 ) (110 ) 2016 $ 2,372 $ 2,934 $ 1,050 $ 6,356 Additions and adjustments 2 553 109 664 Foreign exchange 52 22 74 148 2017 $ 2,426 $ 3,509 $ 1,233 $ 7,168 Estimated Amortization Expense 2018 2019 2020 2021 2022 $ 368 $ 355 $ 330 $ 318 $ 311 |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock [Abstract] | |
Capital Stock | CAPITAL STOCK The aggregate number of shares of all classes of stock with which we are authorized to issue is up to 1,000,500,000 , divided into two classes consisting of 500,000 shares of $1 par value preferred stock and 1,000,000,000 shares of common stock with a par value of $0.10 . No shares of preferred stock were outstanding on December 31, 2017 . In 2017 we repurchased 1.9 million shares at a cost of $230 . 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. On December 31, 2017 the total dollar value of shares that could be purchased under our authorized repurchase program was $1,640 . Shares reserved for future compensation grants of our common stock were 37 million and 11 million on December 31, 2017 and 2016 . Stock Options We measure the cost of employee stock options based on the grant-date fair value and recognize that cost using the straight-line method over the period in which a recipient is required to provide services in exchange for the options, typically the vesting period. The weighted-average fair value per share of options is estimated on the date of grant using the Black-Scholes option pricing model. Option Value and Assumptions 2017 2016 2015 Weighted-average fair value per share $ 22.43 $ 17.73 $ 22.55 Assumptions: Risk-free interest rate 2.0 % 1.3 % 1.8 % Expected dividend yield 1.5 % 1.6 % 1.6 % Expected stock price volatility 19.4 % 20.5 % 25.5 % Expected option life (years) 6.0 6.1 7.3 The risk-free interest rate for periods within the expected life of options granted is based on the United States Treasury yield curve in effect at the time of grant. Expected stock price volatility is based on the historical volatility of our stock. The expected option life, representing the period of time that options granted are expected to be outstanding, is based on historical option exercise and employee termination data. 2017 Stock Option Activity Shares Weighted Weighted-Average Aggregate Outstanding January 1 14.9 $ 73.14 Granted 2.9 122.66 Exercised (2.5 ) 62.66 Canceled (0.6 ) 97.87 Outstanding December 31 14.7 $ 83.71 5.4 $ 956.5 Exercisable December 31 7.5 $ 65.47 4.2 $ 666.8 Options expected to vest 6.6 $ 101.83 7.9 $ 347.9 The aggregate intrinsic value of options, which represents the cumulative difference between the fair market value of the underlying common stock and the option exercise prices, exercised was $184 , $128 , and $98 in 2017 , 2016 and 2015 . Exercise prices for options outstanding ranged from $38.71 to $154.87 on December 31, 2017 . On December 31, 2017 there was $90 of unrecognized compensation cost related to nonvested stock options granted under the long-term incentive plans; that cost is expected to be recognized over the weighted-average period of approximately 1.6 years . Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) Activity Shares Weighted Average RSUs PSUs RSUs PSUs Nonvested on January 1 1.1 0.3 $ 90.10 $ 91.19 Granted 0.5 0.1 117.44 122.41 Vested (0.5 ) (0.1 ) 87.08 81.14 Canceled or forfeited (0.1 ) — 102.01 92.18 Nonvested on December 31 1.0 0.3 $ 104.85 $ 104.51 On December 31, 2017 there was $56 of unrecognized compensation cost related to nonvested RSUs. That cost is expected to be recognized as expense over the weighted-average period of approximately one year . The weighted-average grant date fair value per share of RSUs granted was $117.44 and $94.70 in 2017 and 2016 . The fair value of RSUs and PSUs vested in 2017 was $44 and $7 . On December 31, 2017 there was $13 of unrecognized compensation cost related to nonvested PSUs; the cost is expected to be recognized as expense over the weighted-average period of approximately one year . Employee Stock Purchase Plans (ESPP) Full- and part-time employees may participate in our ESPP provided they meet certain eligibility requirements. The purchase price for our common stock under the terms of the ESPP is defined as 95% of the closing stock price on the last trading day of a purchase period. We issued 163,415 and 159,329 shares under the ESPP in 2017 and 2016 . |
Debt and Credit Facilities
Debt and Credit Facilities | 12 Months Ended |
Dec. 31, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Debt And Credit Facilities | DEBT AND CREDIT FACILITIES In January 2017 we issued $500 of senior unsecured notes with a fixed interest rate of 1.800% due on January 15, 2019. Our commercial paper program allows us to have a maximum of $1,500 in commercial paper outstanding with maturities up to 397 days from the date of issuance. On December 31, 2017 there were no amounts outstanding under our commercial paper program. We have lines of credit issued by various financial institutions that are available to fund our day-to-day operating needs. Certain of our credit facilities require us to comply with financial and other covenants. We were in compliance with all covenants on December 31, 2017 . Summary of Total Debt 2017 2016 Senior unsecured notes: Rate Due 1.300% April 1, 2018 $ 600 $ 598 1.800% January 15, 2019 499 — 2.000% March 8, 2019 748 746 4.375% January 15, 2020 498 497 2.625% March 15, 2021 746 745 3.375% May 15, 2024 598 602 3.375% November 1, 2025 745 744 3.500% March 15, 2026 988 987 4.100% April 1, 2043 391 391 4.375% May 15, 2044 394 395 4.625% March 15, 2046 980 979 Commercial paper — 200 Other 35 30 Total debt $ 7,222 $ 6,914 Less current maturities 632 228 Total long-term debt $ 6,590 $ 6,686 Unamortized debt issuance costs $ 39 $ 45 Borrowing capacity on existing facilities $ 1,547 $ 1,551 Fair value of senior unsecured notes $ 7,521 $ 6,762 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. Interest expense, including required fees incurred on outstanding debt and credit facilities that were included in other expense, totaled $247 , $228 , and $108 in 2017 , 2016 and 2015 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Our effective tax rate was 50.6% , 14.3% and 17.1% for 2017 , 2016 and 2015 . The effective income tax rate for 2017 reflects the impact of complying with the Tax Cuts and Jobs Act of 2017, signed into law in December 2017, partially offset by the benefits from the adoption of ASU 2016-09 Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting on January 1, 2017 and continued lower effective income tax rates as a result of the European headquarters. The establishment of the European regional headquarters contributed to the lower effective income tax rates in 2016 and 2015. Effective Income Tax Rate Reconciliation 2017 2016 2015 United States federal statutory rate 35.0 % 35.0 % 35.0 % United States state and local income taxes, less federal deduction 1.2 1.7 2.1 Foreign income tax at rates other than 35% (21.0 ) (22.2 ) (17.6 ) Tax Cuts and Jobs Act of 2017 transition tax 38.0 — — Tax Cuts and Jobs Act of 2017 deferred tax changes 2.3 — — Tax related to repatriation of foreign earnings — (0.3 ) (3.9 ) Other (4.9 ) 0.1 1.5 Effective income tax rate 50.6 % 14.3 % 17.1 % In December 2017 the Tax Cuts and Jobs Act of 2017 (the Act) was signed into law in the United States. The law includes significant changes to the United States corporate income tax system, including a federal corporate rate reduction, limitations on the deductibility of certain expenses, and the transition of United States international taxation from a worldwide tax system to a territorial tax system. As part of the transition to a territorial tax system, the Act requires taxpayers to calculate a one-time transition tax based on undistributed earnings of foreign subsidiaries. We recorded the transition tax in our current year results which significantly impacted our effective tax rate. Additionally, we recorded additional tax expense to adjust certain deferred tax accounts to the new corporate tax rate. These amounts are our best estimate based on the current information and guidance available at this time and represent provisional estimates of the transition tax related charge and change in deferred tax accounts charge associated with the Act and will be finalized in 2018. Earnings Before Income Taxes 2017 2016 2015 United States $ 499 $ 542 $ 475 International 1,564 1,379 1,260 Total $ 2,063 $ 1,921 $ 1,735 Components of Income Tax Expense Current income tax expense: 2017 2016 2015 United States federal $ 836 $ 94 $ 78 United States state and local 38 50 23 International 133 176 108 Total current income tax expense $ 1,007 $ 320 $ 209 Deferred income tax expense (benefit): United States federal $ 84 $ (17 ) $ 2 United States state and local (9 ) (12 ) 8 International (39 ) (17 ) 77 Total deferred income tax expense (benefit) $ 36 $ (46 ) $ 87 Total income tax expense $ 1,043 $ 274 $ 296 Interest and penalties included in other income (expense), net were expense of ($28) , ($1) and ($4) in 2017 , 2016 and 2015 . The United States federal deferred income tax expense (benefit) includes the utilization of net operating loss carryforwards of $32 , $28 and $79 in 2017 , 2016 and 2015 . Deferred Income Tax Assets and Liabilities Deferred income tax assets: 2017 2016 Inventories $ 480 $ 583 Product-related liabilities 34 115 Other accrued expenses 204 248 State income taxes 46 52 Share-based compensation 46 80 Net operating loss carryforwards 52 74 Other 105 117 Total deferred income tax assets $ 967 $ 1,269 Less valuation allowances (49 ) (51 ) Net deferred income tax assets $ 918 $ 1,218 Deferred income tax liabilities: Depreciation and amortization $ (598 ) $ (871 ) Undistributed earnings (81 ) (50 ) Other (3 ) (50 ) Total deferred income tax liabilities $ (682 ) $ (971 ) Net deferred income tax assets $ 236 $ 247 Reported as: Noncurrent assets—Other $ 283 $ 302 Noncurrent liabilities—Other liabilities (47 ) (55 ) Total $ 236 $ 247 Accrued interest and penalties were $60 and $34 on December 31, 2017 and 2016 , which were reported in current and non-current accrued expenses and other liabilities. Net operating loss carryforwards totaling $219 on December 31, 2017 are available to reduce future taxable earnings of certain domestic and foreign subsidiaries. United States loss carryforwards of $106 expire through 2028. International loss carryforwards of $113 began to expire in 2017 ; however, some have no expiration. Of these carryforwards, $36 are subject to a full valuation allowance. We also have a tax credit carryforward of $43 with $40 being subject to a full valuation allowance. The credits with a full valuation allowance have no expiration; however, we do not anticipate generating income tax in excess of the credits in the foreseeable future. We recorded a transition tax on undistributed foreign earnings as required by the Act. No other provision was made for income taxes that may result from future remittances of the undistributed earnings of foreign subsidiaries that are determined to be indefinitely reinvested, which were $8,484 on December 31, 2017 . Determination of the total amount of unrecognized deferred income tax on undistributed earnings of foreign subsidiaries is not practicable. Uncertain Income Tax Positions 2017 2016 Beginning uncertain tax positions $ 287 $ 313 Increases related to current year income tax positions 123 47 Increases related to prior year income tax positions 131 22 Decreases related to prior year income tax positions: Settlements and resolutions of income tax audits (9 ) (82 ) Statute of limitations expirations (4 ) (9 ) Foreign currency translation 12 (4 ) Ending uncertain tax positions $ 540 $ 287 Reported as: Noncurrent liabilities—Income taxes 540 287 Total $ 540 $ 287 Our income tax expense would have been reduced by $232 and $209 on December 31, 2017 and 2016 had these uncertain income tax positions been favorably resolved. It is reasonably possible that the amount of unrecognized tax benefits will significantly change due to one or more of the following events in the next twelve months: expiring statutes, audit activity, tax payments, competent authority proceedings related to transfer pricing or final decisions in matters that are the subject of controversy in various taxing jurisdictions in which we operate, including inventory transfer pricing, cost sharing, product royalty and foreign branch arrangements. We are not able to reasonably estimate the amount or the future periods in which changes in unrecognized tax benefits may be resolved. Interest and penalties incurred associated with uncertain tax positions are included in other income (expense), net. In the normal course of business, income tax authorities in various income tax jurisdictions both within the United States and internationally conduct routine audits of our income tax returns filed in prior years. These audits are generally designed to determine if individual income tax authorities are in agreement with our interpretations of complex income tax regulations regarding the allocation of income to the various income tax jurisdictions. Income tax years are open from 2012 through the current year for the United States federal jurisdiction. Income tax years open for our other major jurisdictions range from 2005 through the current year. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Retirement Plans | RETIREMENT PLANS Defined Contribution Plans We provide certain employees with defined contribution plans and other types of retirement plans. A portion of our retirement plan expense under the defined contribution plans is funded with Stryker common stock. The use of Stryker common stock represents a non-cash operating activity that is not reflected in our Consolidated Statements of Cash Flows. 2017 2016 2015 Plan expense $ 181 $ 166 $ 148 Expense funded with Stryker common stock 25 22 20 Stryker common stock held by plan: Dollar amount 353 272 203 Shares (in millions) 2.3 2.3 2.2 Value as a percentage of total plan assets 11 % 11 % 11 % Defined Benefit Plans Certain of our subsidiaries have both funded and unfunded defined benefit pension plans covering some or all of their employees. Substantially all of the defined benefit pension plans have projected benefit obligations in excess of plan assets. Discount Rate The discount rates were selected using a hypothetical portfolio of high quality bonds on December 31 that would provide the necessary cash flows to match our projected benefit payments. Effective January 1, 2017, in countries where it was possible, we elected to change the method to calculate the service cost and interest cost components of net periodic benefit costs for our defined benefit plans and will measure these costs by applying the specific spot rates along the yield curve of the projected cash flows for the respective plans. Our defined benefit plans previously utilized the yield curve approach to establish discount rates and we believe the new approach provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and the corresponding spot yield curve rates. The change does not affect the measurement of our total benefit obligations for those plans and is accounted for as a change in accounting estimate inseparable from a change in accounting principle, which is applied prospectively. The reductions in service and interest costs for 2017 associated with this change in estimate are nominal. Expected Return on Plan Assets The expected return on plan assets is determined by applying the target allocation in each asset category of plan investments to the anticipated return for each asset category based on historical and projected returns. Components of Net Periodic Pension Cost Net periodic benefit cost: 2017 2016 2015 Service cost $ (42 ) $ (33 ) $ (36 ) Interest cost (10 ) (11 ) (10 ) Expected return on plan assets 11 10 11 Amortization of prior service credit 1 1 1 Recognized actuarial loss (9 ) (9 ) (13 ) Net periodic benefit cost $ (49 ) $ (42 ) $ (47 ) Changes in assets and benefit obligations recognized in OCI: Net actuarial gain (loss) $ (25 ) $ (26 ) $ 26 Recognized net actuarial loss 9 9 13 Prior service (credit) cost and transition amount (1 ) (1 ) (1 ) Total recognized in other comprehensive income (loss) $ (17 ) $ (18 ) $ 38 Total recognized in net periodic benefit cost and OCI $ (66 ) $ (60 ) $ (9 ) Weighted-average rates used to determine net periodic benefit cost: Discount rate 1.8 % 2.1 % 2.0 % Expected return on plan assets 3.3 % 3.6 % 4.0 % Rate of compensation increase 2.8 % 2.3 % 2.9 % Weighted-average discount rate used to determine projected benefit obligations 1.8 % 1.8 % 2.1 % Investment Strategy The investment strategy for our defined benefit pension plans is to meet the liabilities of the plans as they fall due and to maximize the return on invested assets within appropriate risk tolerances. 2017 2016 Fair value of plan assets $ 370 $ 308 Benefit obligations (708 ) (588 ) Funded status $ (338 ) $ (280 ) Reported as: Current liabilities—accrued compensation $ (2 ) $ (1 ) Noncurrent liabilities—other liabilities (336 ) (279 ) Pre-tax amounts recognized in AOCI: Unrecognized net actuarial loss (189 ) (171 ) Unrecognized prior service credit 12 11 Total $ (177 ) $ (160 ) The estimated net actuarial loss for the defined benefit pension plans to be reclassified from AOCI into net periodic benefit cost is $9 in 2018 .The total estimated amortization of prior service credit and transition asset for the defined benefit pension plans to be reclassified from AOCI into net periodic benefit credit is $1 in 2018 . Change in Benefit Obligations 2017 2016 Beginning projected benefit obligations $ 588 $ 529 Service cost 42 33 Interest cost 10 11 Foreign exchange impact 60 (18 ) Employee contributions 6 6 Actuarial losses 19 40 Acquisition — 7 Benefits paid (17 ) (20 ) Ending projected benefit obligations $ 708 $ 588 Ending accumulated benefit obligations $ 675 $ 560 Change in Plan Assets 2017 2016 Beginning fair value of plan assets $ 308 $ 289 Actual return 21 20 Employer contributions 23 18 Employee contributions 6 6 Foreign exchange impact 26 (9 ) Acquisition — 2 Benefits paid (14 ) (18 ) Ending fair value of plan assets $ 370 $ 308 Allocation of Plan Assets 2017 Target 2017 Actual 2016 Actual Equity securities 26 % 28 % 28 % Debt securities 45 45 50 Other 29 27 22 Total 100 % 100 % 100 % Valuation of Plan Assets 2017 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 4 $ — $ — $ 4 Equity securities 104 17 — 121 Corporate debt securities 33 1 — 34 Other 148 14 49 211 Total $ 289 $ 32 $ 49 $ 370 2016 Cash and cash equivalents $ 7 $ — $ — $ 7 Equity securities 83 17 — 100 Corporate debt securities 127 — — 127 Other 23 13 38 74 Total $ 240 $ 30 $ 38 $ 308 Our Level 3 pension plan assets consist primarily of guaranteed investment contracts with insurance companies. The insurance contracts guarantee us principal repayment and a fixed rate of return. The $11 increase in Level 3 pension plan assets is primarily related to actual returns and acquired assets. We expect to contribute $24 to our defined benefit pension plans in 2018 . Estimated Future Benefit Payments 2018 2019 2020 2021 2022 2023-2027 $ 18 $ 17 $ 17 $ 17 $ 17 $ 101 |
Summary of Quarterly Data (Unau
Summary of Quarterly Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Summary of Quarterly Data (Unaudited) | SUMMARY OF QUARTERLY DATA (UNAUDITED) 2017 Quarter Mar 31 Jun 30 Sep 30 Dec 31 Net sales $ 2,955 $ 3,012 $ 3,006 $ 3,471 Gross profit 1,962 1,990 1,982 2,239 Earnings before income taxes 499 444 471 649 Net earnings 444 391 434 (249 ) Net earnings per share of common stock: Basic $ 1.19 $ 1.04 $ 1.16 $ (0.66 ) Diluted $ 1.17 $ 1.03 $ 1.14 $ (0.66 ) Market price of common stock: High $ 133.59 $ 145.62 $ 148.84 $ 160.62 Low $ 116.50 $ 129.82 $ 137.70 $ 141.68 Dividends declared per share of common stock $ 0.425 $ 0.425 $ 0.425 $ 0.47 2016 Quarter Mar 31 Jun 30 Sep 30 Dec 31 Net sales $ 2,495 $ 2,840 $ 2,833 $ 3,157 Gross profit 1,694 1,842 1,873 2,086 Earnings before income taxes 481 433 419 588 Net earnings 402 380 355 510 Net earnings per share of common stock: Basic $ 1.08 $ 1.02 $ 0.95 $ 1.36 Diluted $ 1.07 $ 1.00 $ 0.94 $ 1.34 Market price of common stock: High $ 107.95 $ 119.83 $ 123.55 $ 121.84 Low $ 86.68 $ 106.26 $ 109.75 $ 106.48 Dividends declared per share of common stock $ 0.38 $ 0.38 $ 0.38 $ 0.425 |
Segment and Geographic Data
Segment and Geographic Data | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment and Geographic Data | SEGMENT AND GEOGRAPHIC DATA We segregate our operations into three reportable business segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. The Corporate and Other category shown in the table below includes corporate and administration, corporate initiatives and share-based compensation, which includes compensation related to employee stock options, restricted stock units and performance stock unit grants and director stock options and restricted stock unit grants. Segment Results 2017 2016 2015 Orthopaedics $ 4,713 $ 4,422 $ 4,223 MedSurg 5,557 4,894 3,895 Neurotechnology & Spine 2,174 2,009 1,828 Net sales $ 12,444 $ 11,325 $ 9,946 Orthopaedics $ 337 $ 317 $ 290 MedSurg 315 249 117 Neurotechnology & Spine 142 140 132 Segment depreciation and amortization $ 794 $ 706 $ 539 Corporate and Other 65 46 51 Total depreciation and amortization $ 859 $ 752 $ 590 Orthopaedics $ 1,669 $ 1,597 $ 1,487 MedSurg 1,225 1,085 822 Neurotechnology & Spine 639 557 474 Segment operating income $ 3,533 $ 3,239 $ 2,783 Items not allocated to segments: Corporate and Other $ (402 ) $ (352 ) $ (302 ) Acquisition & integration-related charges (64 ) (131 ) (35 ) Amortization of intangible assets (371 ) (319 ) (210 ) Restructuring related-charges (194 ) (125 ) (132 ) Rejuvenate and related-charges (173 ) (158 ) (296 ) Regulatory and legal matters (39 ) 12 53 Consolidated operating income $ 2,290 $ 2,166 $ 1,861 Segment Assets and Capital Spending Assets: 2017 2016 2015 Orthopaedics $ 7,486 $ 7,048 $ 6,149 MedSurg 9,759 8,553 5,341 Neurotechnology & Spine 4,105 4,129 3,904 Total segment assets $ 21,350 $ 19,730 $ 15,394 Corporate and Other 847 705 829 Total assets $ 22,197 $ 20,435 $ 16,223 Capital spending: Orthopaedics $ 138 $ 153 $ 95 MedSurg 194 129 89 Neurotechnology & Spine 50 25 28 Total segment capital spending $ 382 $ 307 $ 212 Corporate and Other 216 183 58 Total capital spending $ 598 $ 490 $ 270 We measure the financial results of our reportable segments using an internal performance measure that excludes acquisition and integration-related charges, restructuring-related charges, reserves for certain product recall matters, reserves for certain legal and regulatory matters and a donation to an educational institution. Identifiable assets are those assets used exclusively in the operations of each business segment or allocated when used jointly. Corporate assets are principally cash and cash equivalents, marketable securities and property, plant and equipment. The countries in which we have local revenue generating operations have been combined into the following geographic areas: the United States (including Puerto Rico); Europe, Middle East, Africa; Asia Pacific; and other foreign countries, which include Canada and countries in the Latin American region. Net sales are reported based off the geographic area of the Stryker location where the sales to the customer originated. Geographic Information Net Sales Net Property, Plant and Equipment 2017 2016 2015 2017 2016 United States $ 9,059 $ 8,230 $ 7,116 $ 1,102 $ 941 Europe, Middle East, Africa 1,567 1,437 1,267 718 493 Asia Pacific 1,413 1,325 1,251 107 105 Other countries 405 333 312 48 30 Total $ 12,444 $ 11,325 $ 9,946 $ 1,975 $ 1,569 |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Significant Accounting Policies [Abstract] | |
Nature of Operations | Stryker Corporation (the "Company," "we," "us," or "our") is one of the world's leading medical technology companies and, together with its customers, is driven to make healthcare better. The Company offers innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that improve patient and hospital outcomes. Our products |
Basis of Presentation and Consideration | The Consolidated Financial Statements include the Company and its subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. We have no material interests in variable interest entities and none that require consolidation. Certain prior year amounts have been reclassified to conform to the presentation of our Consolidated Financial Statements in 2017 . |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of net sales and expenses in the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Sales are recognized when revenue is realized or realizable and has been earned. Our policy is to recognize revenue when title to the product, ownership and risk of loss transfer to the customer, which can be on the date of shipment, the date of receipt by the customer or, for most Orthopaedics products, when we receive appropriate notification that the product has been used or implanted. A provision for estimated sales returns, discounts, rebates and other sales incentives is recorded as a reduction of net sales in the same period that the revenue is recognized. Shipping and handling costs charged to customers are included in net sales. |
Cost of Sales | Cost of sales is primarily comprised of direct materials and supplies consumed in the manufacture of product, as well as manufacturing labor, depreciation expense and direct overhead expense necessary to acquire and convert the purchased materials and supplies into finished product. Cost of sales also includes the cost to distribute products to customers, inbound freight costs, warehousing costs and other shipping and handling activity. |
Research, Development and Engineering Expenses | Research and development costs are charged to expense as incurred. Costs include research, development and engineering activities relating to the development of new products, improvement of existing products, technical support of products and compliance with governmental regulations for the protection of customers and patients. Costs primarily consist of salaries, wages, consulting and depreciation and maintenance of research facilities and equipment. |
Selling, General and Administrative Expenses | Selling, general and administrative expense is primarily comprised of selling expenses, marketing expenses, administrative and other indirect overhead costs, amortization of loaner instrumentation, depreciation and amortization expense of non-manufacturing assets and other miscellaneous operating items. |
Currency Translation | Financial statements of subsidiaries outside the United States generally are measured using the local currency as the functional currency. Adjustments to translate those statements into United States Dollars are recorded in other comprehensive income (OCI). Transactional exchange gains and losses are included in earnings. |
Cash Equivalents | Highly liquid investments with remaining stated maturities of three months or less when purchased are considered cash equivalents and recorded at cost. |
Marketable Securities | Marketable securities consist of marketable debt securities, certificates of deposit and mutual funds. Mutual funds are acquired to offset changes in certain liabilities related to deferred compensation arrangements and are expected to be used to settle these liabilities. Pursuant to our investment policy, all individual marketable security investments must have a minimum credit quality of single A (Standard & Poor’s and Fitch) and A2 (Moody’s Corporation) at the time of acquisition, while the overall portfolio of marketable securities must maintain a minimum average credit quality of double A (Standard & Poor’s and Fitch) or Aa (Moody’s Corporation). In the event of a rating downgrade below the minimum credit quality subsequent to purchase, the marketable security investment is evaluated to determine the appropriate action to take to minimize the overall risk to our marketable security investment portfolio. Our marketable securities are classified as available-for-sale and trading securities. Investments in trading securities represent participant-directed investments of deferred employee compensation. |
Accounts Receivable | Accounts receivable consists of trade and other miscellaneous receivables. An allowance is maintained for doubtful accounts for estimated losses in the collection of accounts receivable. Estimates are made regarding the ability of customers to make required payments based on historical credit experience and expected future trends. Accounts receivable are written off when all reasonable collection efforts are exhausted. |
Inventories | Inventories are stated at the lower of cost or market, with cost generally determined using the first-in, first-out (FIFO) cost method. For excess and obsolete inventory resulting from the potential inability to sell specific products at prices in excess of current carrying costs, reserves are maintained to reduce current carrying cost to market prices. |
Financial Instruments | Our financial instruments consist of cash, cash equivalents, marketable securities, accounts receivable, other investments, accounts payable, debt and foreign currency exchange contracts. The carrying value of our financial instruments, with the exception of our senior unsecured notes, approximates fair value on December 31, 2017 and 2016 . Refer to Note 2 and 9 for further details. All marketable securities are recognized at fair value. Adjustments to the fair value of marketable securities that are classified as available-for-sale are recorded as increases or decreases, net of income taxes, within accumulated other comprehensive income (AOCI) in shareholders’ equity and adjustments to the fair value of marketable securities that are classified as trading are recorded in earnings. The amortized cost of marketable debt securities is adjusted for amortization of premiums and discounts to maturity computed under the effective interest method. Such amortization and interest and realized gains and losses are included in other income (expense), net. The cost of securities sold is determined by the specific identification method. We review declines in the fair value of our investments classified as available-for-sale to determine whether the decline in fair value is an other-than-temporary impairment. The resulting losses from other-than-temporary impairments of available-for-sale marketable securities are included in earnings. |
Derivatives | All derivatives are recognized at fair value and reported on a gross basis. We enter into forward currency exchange contracts to mitigate the impact of currency fluctuations on transactions denominated in nonfunctional currencies, thereby limiting our risk that would otherwise result from changes in exchange rates. The periods of the forward currency exchange contracts correspond to the periods of the exposed transactions, with realized gains and losses included in the measurement and recording of transactions denominated in the nonfunctional currencies. All forward currency exchange contracts are recorded at their fair value each period. Forward currency exchange contracts designated as cash flow hedges are designed to hedge the variability of cash flows associated with forecasted transactions denominated in a foreign currency that will take place in the future. These nonfunctional currency exposures principally relate to forecasted intercompany purchases of manufactured products and generally have maturities up to eighteen months. Changes in value of derivatives designated as cash flow hedges are recorded in AOCI on the Consolidated Balance Sheets until earnings are affected by the variability of the underlying cash flows. At that time, the applicable amount of gain or loss from the derivative instrument that is deferred in shareholders’ equity is reclassified into earnings and is included in other income (expense), net or cost of goods sold in the Consolidated Statements of Earnings, depending on the underlying transaction that is being hedged. Cash flows associated with these hedges are included in cash from operations in the same category as the cash flows from the items being hedged. Derivative forward contracts are used to offset our exposure to the change in value of specific foreign currency denominated assets and liabilities, primarily intercompany payables and receivables. These derivatives are not designated as hedges and, therefore, changes in the value of these forward contracts are recognized in earnings, thereby offsetting the current earnings effect of the related changes in value of foreign currency denominated assets and liabilities. The estimated fair value of our forward currency exchange contracts represents the measurement of the contracts at month-end spot rates as adjusted by current forward points. We designated certain long-term intercompany loans payable and forward exchange contracts as net investment hedges of our investments in certain international subsidiaries that use the Euro as their functional currency. For derivative instruments that are designated and qualify as a net investment hedge, the effective portion of the derivative's gain or loss is recognized in OCI and reported as a component of AOCI. We use the forward method to measure ineffectiveness. Under this method the change in the carrying value of the Euro-denominated amounts due to remeasurement of the effective portion is reported as a component of AOCI. The remaining change in the carrying value of the ineffective portion, if any, is recognized in other income (expense), net. The gain or loss related to settled net investment hedges will be subsequently reclassified into net earnings when the hedged net investment is either sold or substantially liquidated. Forward starting interest rate derivative instruments designated as cash flow hedges are used to manage the exposure to interest rate volatility with regard to future issuance and refinancing of debt. The effective portion of the gain or loss on a forward starting interest rate derivative instrument that is designated and qualifies as a cash flow hedge is reported as a component of AOCI. Beginning in the period in which the debt refinancing occurs and the related derivative instruments is terminated, the effective portion of the gains or losses is then reclassified into interest expense over the term of the related debt. Interest rate derivative instruments designated as fair value hedges are being used to manage the exposure to interest rate movements and to reduce borrowing costs by converting fixed-rate debt into floating-rate debt. Under these agreements, we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. |
Property, Plant and Equipment | Property, plant and equipment is stated at cost. Depreciation is generally computed by the straight-line method over the estimated useful lives of three to 30 years for buildings and improvements and three to 10 years for machinery and equipment. |
Goodwill and Other Intangible Assets | Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses at the acquisition date, after amounts allocated to other identifiable intangible assets. Factors that contribute to the recognition of goodwill include synergies that are specific to our business and not available to other market participants and are expected to increase net sales and profits; acquisition of a talented workforce; cost savings opportunities; the strategic benefit of expanding our presence in core and adjacent markets; and diversifying our product portfolio. The fair values of other identifiable intangible assets are primarily determined using the income approach. Other intangible assets include, but are not limited to, developed technology, customer and distributor relationships (which reflect expected continued customer or distributor patronage) and trademarks and patents. Intangible assets with determinable useful lives are amortized on a straight-line basis over their estimated useful lives of four to 40 years. Certain acquired trade names are considered to have indefinite lives and are not amortized, but are assessed annually for potential impairment as described below. In some of our acquisitions, we acquire in-process research and development (IPRD), which is an indefinite-lived intangible asset. IPRD where research has been completed becomes a determinable-lived intangible asset and IPRD determined to have no future use becomes impaired. |
Goodwill, Intangibles and Long-Lived Asset Impairment Tests | We perform our annual impairment test for goodwill in the fourth quarter of each year. We consider qualitative indicators of the fair value of a reporting unit when it is unlikely that a reporting unit has impaired goodwill. In certain circumstances, we may also utilize a discounted cash flow analysis that requires certain assumptions and estimates be made regarding market conditions and our future profitability. Indefinite-lived intangible assets are also tested at least annually for impairment by comparing the individual carrying values to the fair value. We review long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows. Undiscounted cash flows expected to be generated by the related assets are estimated over the asset's useful life based on updated projections. If the evaluation indicates that the carrying amount of the asset may not be recoverable, any potential impairment is measured based upon the fair value of the related asset or asset group as determined by an appropriate market appraisal or other valuation technique. Assets classified as held for sale are recorded at the lower of carrying amount or fair value less costs to sell. |
Share-Based Compensation | We use share based compensation in the form of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PSUs). Stock options are granted under long-term incentive plans to certain key employees and non-employee directors at an exercise price not less than the fair market value of the underlying common stock, which is the quoted closing price of our common stock on the day prior to the date of grant. The options are granted for periods of up to 10 years and become exercisable in varying installments. We grant RSUs to key employees and non-employee directors and PSUs to certain key employees under our long-term incentive plans. The fair value of RSUs is determined based on the number of shares granted and the quoted closing price of our common stock on the date of grant, adjusted for the fact that RSUs do not include anticipated dividends. RSUs generally vest in one-third increments over a three -year period and are settled in stock. PSUs are earned over a three -year performance cycle and vest in March of the year following the end of that performance cycle. The number of PSUs that will ultimately be earned is based on our performance relative to pre-established goals in that three -year performance cycle. The fair value of PSUs is determined based on the quoted closing price of our common stock on the day of grant. Compensation expense is recognized in the Consolidated Statements of Earnings based on the estimated fair value of the awards on the grant date. Compensation expense recognized reflects an estimate of the number of awards expected to vest after taking into consideration an estimate of award forfeitures based on actual experience and is recognized on a straight-line basis over the requisite service period, which is generally the period required to obtain full vesting. Management expectations related to the achievement of performance goals associated with PSU grants is assessed regularly and that assessment is used to determine whether PSU grants are expected to vest. If performance-based milestones related to PSU grants are not met or not expected to be met, any compensation expense recognized associated with such grants will be reversed. |
Income Taxes | Deferred income tax assets and liabilities are determined based on differences between financial reporting and income tax bases of assets and liabilities and are measured using the enacted income tax rates in effect for the years in which the differences are expected to reverse. Deferred income tax benefits generally represent the change in net deferred income tax assets and liabilities in the year. Other amounts result from adjustments related to acquisitions and foreign currency as appropriate. We operate in multiple income tax jurisdictions both within the United States and internationally. Accordingly, management must determine the appropriate allocation of income to each of these jurisdictions based on current interpretations of complex income tax regulations. Income tax authorities in these jurisdictions regularly perform audits of our income tax filings. Income tax audits associated with the allocation of this income and other complex issues, including inventory transfer pricing and cost sharing, product royalty and foreign branch arrangements, may require an extended period of time to resolve and may result in significant income tax adjustments if changes to the income allocation are required between jurisdictions with different income tax rates. |
New Accounting Pronouncements Not Yet Adopted and Accounting Pronouncements Recently Adopted | New Accounting Pronouncements Not Yet Adopted In August 2017 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities, which amends and simplifies hedge accounting guidance, as well as improves presentation and disclosure to align the economic effects of risk management strategies in the financial statements. The update is effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years. Early adoption is permitted. We have performed a preliminary assessment of the impact from this update and do not expect the adoption of this standard to have a material impact on our Consolidated Financial Statements. We are currently evaluating our timing of adopting this standard. In May 2017 the FASB issued ASU 2017-09, Compensation - Stock Compensation, which revises the guidance related to changes in terms or conditions of a share-based payment award. We plan to adopt this update on January 1, 2018 and do not expect the adoption to have a material impact on our Consolidated Financial Statements. In March 2017 the FASB issued ASU 2017-07, Compensation - Retirement Benefits, which revises the recognition and presentation of the elements of net pension benefit costs. We plan to adopt this update on January 1, 2018 and do not expect the adoption to have a material impact on our Consolidated Financial Statements. In February 2016 the FASB issued ASU 2016-02, Leases. This update requires an entity to recognize assets and liabilities on the balance sheet for leases with terms greater than 12 months. We are in the process of evaluating the impact on our Consolidated Financial Statements and anticipate most of our current operating leases, as well as some service contracts, will result in the recognition of right to use assets and corresponding lease liabilities in our Consolidated Balance Sheets. We also anticipate changes in classification between financial statement line items in our Consolidated Statements of Earnings and Consolidated Statements of Cash Flows, but do not anticipate adoption of the update will have a material impact on net earnings and cash flows. We plan to adopt this update on January 1, 2019. In October 2016 the FASB issued ASU 2016-16, Income Taxes, Intra-Entity Transfers of Assets Other Than Inventory, which requires companies to account for the income tax effect of intercompany sales and transfers of assets other than inventory when the transfer occurs. Under current guidance, we defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized. We will adopt this update on January 1, 2018. We have finalized our assessment of the impact from this update and have recorded a cumulative-effect adjustment to decrease retained earnings in the amount of approximately $696 as of January 1, 2018. In May 2014 the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This update outlines a single, comprehensive model for accounting for revenue from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We plan to adopt this update on January 1, 2018 using the modified retrospective approach by recognizing the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings for 2018. We have finalized our assessment of the impact from this update and have recorded a cumulative-effect adjustment to decrease retained earnings in the amount of $55 as of January 1, 2018. We expect the impact from adoption of this standard will be recognized in our Consolidated Statements of Earnings in 2018. Accounting Pronouncements Recently Adopted On January 1, 2017 we adopted ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The impact on our Consolidated Statements of Earnings in 2017 was a tax benefit of $57 . In our prior year Consolidated Statements of Cash Flow we reclassified $36 from other financing to income taxes within operating activities to conform to current year presentation. On January 1, 2017 we adopted ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. The adoption of this update did not have a material impact on our Consolidated Financial Statements. No other new accounting pronouncements were issued or became effective in the period that had, or are expected to have, a material impact on our Consolidated Financial Statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Assets Measured at Fair Value 2017 2016 Cash and cash equivalents $ 2,542 $ 3,316 Trading marketable securities 121 94 Level 1 - Assets $ 2,663 $ 3,410 Available-for-sale marketable securities: Corporate and asset-backed debt securities $ 125 $ 25 Foreign government debt securities 2 — United States agency debt securities 27 9 United States treasury debt securities 70 16 Certificates of deposit 27 18 Total available-for-sale marketable securities $ 251 $ 68 Foreign currency exchange forward contracts 15 45 Interest rate swap asset 49 57 Level 2 - Assets $ 315 $ 170 Total assets measured at fair value $ 2,978 $ 3,580 Liabilities Measured at Fair Value 2017 2016 Deferred compensation arrangements $ 121 $ 94 Level 1 - Liabilities $ 121 $ 94 Foreign currency exchange forward contracts $ 37 $ 18 Level 2 - Liabilities $ 37 $ 18 Contingent consideration: Beginning $ 86 $ 56 Additions 3 49 Change in estimate 2 (7 ) Settlements (59 ) (12 ) Ending $ 32 $ 86 Level 3 - Liabilities $ 32 $ 86 Total liabilities measured at fair value $ 190 $ 198 |
Available-for-sale Securities | Fair Value of Available for Sale Securities by Maturity 2017 2016 Due in one year or less $ 107 $ 36 Due after one year through three years $ 144 $ 32 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | Securities in a Continuous Unrealized Loss Position Number of Investments Fair Value Corporate and Asset-Backed 118 $ 108 Foreign government 1 2 United States Agency 15 20 United States Treasury 20 70 Certificate of Deposit 28 23 Total 182 $ 223 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | 2017 Designated Non-Designated Total Gross notional amount $ 1,104 $ 4,767 $ 5,871 Maximum term in days 548 Fair value: Other current assets $ 11 $ 4 $ 15 Other noncurrent assets 1 — 1 Other current liabilities (7 ) (29 ) (36 ) Other noncurrent liabilities (1 ) — (1 ) Total fair value $ 4 $ (25 ) $ (21 ) 2016 Gross notional amount $ 1,058 $ 2,841 $ 3,899 Maximum term in days 548 Fair value: Other current assets $ 24 $ 17 $ 41 Other noncurrent assets 4 — 4 Other current liabilities (9 ) (7 ) (16 ) Other noncurrent liabilities (2 ) — (2 ) Total fair value $ 17 $ 10 $ 27 |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | Net Currency Exchange Rate Gains (Losses) Recorded in: 2017 2016 2015 Cost of sales $ (6 ) $ — $ 19 Other income (expense), net (9 ) (19 ) (22 ) Total $ (15 ) $ (19 ) $ (3 ) |
Schedule of Derivative Instruments | Fair Value Interest Rate Hedge Instruments 2017 2016 Gross notional amount $ 500 $ 500 Fair value: Other noncurrent assets 5 9 Long-term debt (5 ) (9 ) Total $ — $ — |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive (Loss) Income (AOCI) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Reclassification Adjustments Out of Accumulated Other Comprehensive Income (AOCI) [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Marketable Securities Pension Plans Hedges Financial Statement Translation Total 2015 $ — $ (119 ) $ 4 $ (524 ) $ (639 ) OCI 3 (20 ) 35 (112 ) (94 ) Income taxes (1 ) 3 (15 ) (17 ) (30 ) Reclassifications to: Cost of Sales — 6 — — 6 Other income (3 ) — — — (3 ) Income taxes 1 (2 ) — — (1 ) Net OCI — (13 ) 20 (129 ) (122 ) 2016 $ — $ (132 ) $ 24 $ (653 ) $ (761 ) OCI (7 ) (27 ) (4 ) 163 125 Income taxes 1 19 4 47 71 Reclassifications to: Cost of Sales — 8 6 — 14 Other Income 2 — — — 2 Income taxes — (2 ) (2 ) — (4 ) Net OCI (4 ) (2 ) 4 210 208 2017 $ (4 ) $ (134 ) $ 28 $ (443 ) $ (553 ) |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Allocation Of The Preliminary Purchase Price To The Acquired Net Assets Of Acquisitions | Purchase Price Allocation of Acquired Net Assets 2017 2016 NOVADAQ Sage Physio Purchase price paid $ 716 $ 2,870 $ 1,299 Contingent consideration — 5 — Total consideration $ 716 $ 2,875 $ 1,299 Tangible assets acquired: Cash 42 91 32 Accounts receivable 11 29 107 Inventory 39 63 61 Other assets 9 80 103 Liabilities (58 ) (83 ) (364 ) Intangible assets: Customer relationship 18 930 344 Trade name 1 70 160 Developed technology and patents 133 173 226 IPRD — — 7 Goodwill 521 1,522 623 $ 716 $ 2,875 $ 1,299 Weighted average life of intangible assets 14 15 14 |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Purchase Obligations and Minimum Lease Payments | Future Obligations 2018 2019 2020 2021 2022 Thereafter Debt repayments $ 600 $ 1,250 $ 500 $ 750 $ — $ 4,150 Purchase obligations $ 1,046 $ 95 $ 2 $ 1 $ — $ — Minimum lease payments $ 106 $ 63 $ 45 $ 31 $ 21 $ 60 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of the Company's Other Intangible Assets | Summary of Other Intangible Assets Weighted Average Amortization Period (Years) Gross Less Net Developed technologies 2017 12 $ 2,416 $ 917 $ 1,499 2016 14 2,091 706 1,385 Customer relationships 2017 15 $ 2,088 $ 561 $ 1,527 2016 15 2,049 407 1,642 Patents 2017 10 $ 340 $ 227 $ 113 2016 11 317 206 111 Trademarks 2017 18 $ 352 $ 84 $ 268 2016 18 348 59 289 In-process research and development 2017 N/A $ 25 — $ 25 2016 N/A 30 — 30 Other 2017 9 $ 93 $ 48 $ 45 2016 12 115 64 51 Total 2017 14 $ 5,314 $ 1,837 $ 3,477 2016 15 $ 4,950 $ 1,442 $ 3,508 |
Changes in the Net Carrying Amount of Goodwill by Segment | Changes in the Net Carrying Value of Goodwill by Segment Orthopaedics MedSurg Neurotechnology and Spine Total 2015 $ 2,344 $ 782 $ 1,010 $ 4,136 Additions and adjustments 72 2,196 62 2,330 Foreign exchange (44 ) (44 ) (22 ) (110 ) 2016 $ 2,372 $ 2,934 $ 1,050 $ 6,356 Additions and adjustments 2 553 109 664 Foreign exchange 52 22 74 148 2017 $ 2,426 $ 3,509 $ 1,233 $ 7,168 |
Estimated Amortization Expense | Estimated Amortization Expense 2018 2019 2020 2021 2022 $ 368 $ 355 $ 330 $ 318 $ 311 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock [Abstract] | |
Schedule of Fair Value Assumptions | Option Value and Assumptions 2017 2016 2015 Weighted-average fair value per share $ 22.43 $ 17.73 $ 22.55 Assumptions: Risk-free interest rate 2.0 % 1.3 % 1.8 % Expected dividend yield 1.5 % 1.6 % 1.6 % Expected stock price volatility 19.4 % 20.5 % 25.5 % Expected option life (years) 6.0 6.1 7.3 |
Summary of Stock Option Activity | 2017 Stock Option Activity Shares Weighted Weighted-Average Aggregate Outstanding January 1 14.9 $ 73.14 Granted 2.9 122.66 Exercised (2.5 ) 62.66 Canceled (0.6 ) 97.87 Outstanding December 31 14.7 $ 83.71 5.4 $ 956.5 Exercisable December 31 7.5 $ 65.47 4.2 $ 666.8 Options expected to vest 6.6 $ 101.83 7.9 $ 347.9 |
Summary of RSU and PSU Activity | Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) Activity Shares Weighted Average RSUs PSUs RSUs PSUs Nonvested on January 1 1.1 0.3 $ 90.10 $ 91.19 Granted 0.5 0.1 117.44 122.41 Vested (0.5 ) (0.1 ) 87.08 81.14 Canceled or forfeited (0.1 ) — 102.01 92.18 Nonvested on December 31 1.0 0.3 $ 104.85 $ 104.51 |
Debt and Credit Facilities (Tab
Debt and Credit Facilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Maturities Of Long-Term Debt Disclosures | Summary of Total Debt 2017 2016 Senior unsecured notes: Rate Due 1.300% April 1, 2018 $ 600 $ 598 1.800% January 15, 2019 499 — 2.000% March 8, 2019 748 746 4.375% January 15, 2020 498 497 2.625% March 15, 2021 746 745 3.375% May 15, 2024 598 602 3.375% November 1, 2025 745 744 3.500% March 15, 2026 988 987 4.100% April 1, 2043 391 391 4.375% May 15, 2044 394 395 4.625% March 15, 2046 980 979 Commercial paper — 200 Other 35 30 Total debt $ 7,222 $ 6,914 Less current maturities 632 228 Total long-term debt $ 6,590 $ 6,686 Unamortized debt issuance costs $ 39 $ 45 Borrowing capacity on existing facilities $ 1,547 $ 1,551 Fair value of senior unsecured notes $ 7,521 $ 6,762 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of U.S. Statutory Income Tax Rate to Company's Effective Income Tax Rate from Continuing Operations | Effective Income Tax Rate Reconciliation 2017 2016 2015 United States federal statutory rate 35.0 % 35.0 % 35.0 % United States state and local income taxes, less federal deduction 1.2 1.7 2.1 Foreign income tax at rates other than 35% (21.0 ) (22.2 ) (17.6 ) Tax Cuts and Jobs Act of 2017 transition tax 38.0 — — Tax Cuts and Jobs Act of 2017 deferred tax changes 2.3 — — Tax related to repatriation of foreign earnings — (0.3 ) (3.9 ) Other (4.9 ) 0.1 1.5 Effective income tax rate 50.6 % 14.3 % 17.1 % |
Schedule of Provision for Income Taxes | Earnings Before Income Taxes 2017 2016 2015 United States $ 499 $ 542 $ 475 International 1,564 1,379 1,260 Total $ 2,063 $ 1,921 $ 1,735 Components of Income Tax Expense Current income tax expense: 2017 2016 2015 United States federal $ 836 $ 94 $ 78 United States state and local 38 50 23 International 133 176 108 Total current income tax expense $ 1,007 $ 320 $ 209 Deferred income tax expense (benefit): United States federal $ 84 $ (17 ) $ 2 United States state and local (9 ) (12 ) 8 International (39 ) (17 ) 77 Total deferred income tax expense (benefit) $ 36 $ (46 ) $ 87 Total income tax expense $ 1,043 $ 274 $ 296 |
Schedule of Difference in Income Tax Effects Comprising Company's Deferred Income Tax Assets and Liabilities | Deferred Income Tax Assets and Liabilities Deferred income tax assets: 2017 2016 Inventories $ 480 $ 583 Product-related liabilities 34 115 Other accrued expenses 204 248 State income taxes 46 52 Share-based compensation 46 80 Net operating loss carryforwards 52 74 Other 105 117 Total deferred income tax assets $ 967 $ 1,269 Less valuation allowances (49 ) (51 ) Net deferred income tax assets $ 918 $ 1,218 Deferred income tax liabilities: Depreciation and amortization $ (598 ) $ (871 ) Undistributed earnings (81 ) (50 ) Other (3 ) (50 ) Total deferred income tax liabilities $ (682 ) $ (971 ) Net deferred income tax assets $ 236 $ 247 Reported as: Noncurrent assets—Other $ 283 $ 302 Noncurrent liabilities—Other liabilities (47 ) (55 ) Total $ 236 $ 247 |
Schedule of Unresolved Income Tax Positions | Uncertain Income Tax Positions 2017 2016 Beginning uncertain tax positions $ 287 $ 313 Increases related to current year income tax positions 123 47 Increases related to prior year income tax positions 131 22 Decreases related to prior year income tax positions: Settlements and resolutions of income tax audits (9 ) (82 ) Statute of limitations expirations (4 ) (9 ) Foreign currency translation 12 (4 ) Ending uncertain tax positions $ 540 $ 287 Reported as: Noncurrent liabilities—Income taxes 540 287 Total $ 540 $ 287 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan Disclosures | 2017 2016 2015 Plan expense $ 181 $ 166 $ 148 Expense funded with Stryker common stock 25 22 20 Stryker common stock held by plan: Dollar amount 353 272 203 Shares (in millions) 2.3 2.3 2.2 Value as a percentage of total plan assets 11 % 11 % 11 % |
Schedule of Costs of Retirement Plans | Components of Net Periodic Pension Cost Net periodic benefit cost: 2017 2016 2015 Service cost $ (42 ) $ (33 ) $ (36 ) Interest cost (10 ) (11 ) (10 ) Expected return on plan assets 11 10 11 Amortization of prior service credit 1 1 1 Recognized actuarial loss (9 ) (9 ) (13 ) Net periodic benefit cost $ (49 ) $ (42 ) $ (47 ) Changes in assets and benefit obligations recognized in OCI: Net actuarial gain (loss) $ (25 ) $ (26 ) $ 26 Recognized net actuarial loss 9 9 13 Prior service (credit) cost and transition amount (1 ) (1 ) (1 ) Total recognized in other comprehensive income (loss) $ (17 ) $ (18 ) $ 38 Total recognized in net periodic benefit cost and OCI $ (66 ) $ (60 ) $ (9 ) Weighted-average rates used to determine net periodic benefit cost: Discount rate 1.8 % 2.1 % 2.0 % Expected return on plan assets 3.3 % 3.6 % 4.0 % Rate of compensation increase 2.8 % 2.3 % 2.9 % Weighted-average discount rate used to determine projected benefit obligations 1.8 % 1.8 % 2.1 % |
Schedule of Defined Benefit Plans Disclosures | 2017 2016 Fair value of plan assets $ 370 $ 308 Benefit obligations (708 ) (588 ) Funded status $ (338 ) $ (280 ) Reported as: Current liabilities—accrued compensation $ (2 ) $ (1 ) Noncurrent liabilities—other liabilities (336 ) (279 ) Pre-tax amounts recognized in AOCI: Unrecognized net actuarial loss (189 ) (171 ) Unrecognized prior service credit 12 11 Total $ (177 ) $ (160 ) |
Schedule of Changes in Accumulated Postemployment Benefit Obligations | Change in Benefit Obligations 2017 2016 Beginning projected benefit obligations $ 588 $ 529 Service cost 42 33 Interest cost 10 11 Foreign exchange impact 60 (18 ) Employee contributions 6 6 Actuarial losses 19 40 Acquisition — 7 Benefits paid (17 ) (20 ) Ending projected benefit obligations $ 708 $ 588 Ending accumulated benefit obligations $ 675 $ 560 |
Schedule of Changes in Fair Value of Plan Assets | Valuation of Plan Assets 2017 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 4 $ — $ — $ 4 Equity securities 104 17 — 121 Corporate debt securities 33 1 — 34 Other 148 14 49 211 Total $ 289 $ 32 $ 49 $ 370 2016 Cash and cash equivalents $ 7 $ — $ — $ 7 Equity securities 83 17 — 100 Corporate debt securities 127 — — 127 Other 23 13 38 74 Total $ 240 $ 30 $ 38 $ 308 Change in Plan Assets 2017 2016 Beginning fair value of plan assets $ 308 $ 289 Actual return 21 20 Employer contributions 23 18 Employee contributions 6 6 Foreign exchange impact 26 (9 ) Acquisition — 2 Benefits paid (14 ) (18 ) Ending fair value of plan assets $ 370 $ 308 |
Schedule of Allocation of Plan Assets | Allocation of Plan Assets 2017 Target 2017 Actual 2016 Actual Equity securities 26 % 28 % 28 % Debt securities 45 45 50 Other 29 27 22 Total 100 % 100 % 100 % |
Schedule of Expected Benefit Payments | Estimated Future Benefit Payments 2018 2019 2020 2021 2022 2023-2027 $ 18 $ 17 $ 17 $ 17 $ 17 $ 101 |
Summary of Quarterly Data (Un32
Summary of Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Summary of Quarterly Data | 2017 Quarter Mar 31 Jun 30 Sep 30 Dec 31 Net sales $ 2,955 $ 3,012 $ 3,006 $ 3,471 Gross profit 1,962 1,990 1,982 2,239 Earnings before income taxes 499 444 471 649 Net earnings 444 391 434 (249 ) Net earnings per share of common stock: Basic $ 1.19 $ 1.04 $ 1.16 $ (0.66 ) Diluted $ 1.17 $ 1.03 $ 1.14 $ (0.66 ) Market price of common stock: High $ 133.59 $ 145.62 $ 148.84 $ 160.62 Low $ 116.50 $ 129.82 $ 137.70 $ 141.68 Dividends declared per share of common stock $ 0.425 $ 0.425 $ 0.425 $ 0.47 2016 Quarter Mar 31 Jun 30 Sep 30 Dec 31 Net sales $ 2,495 $ 2,840 $ 2,833 $ 3,157 Gross profit 1,694 1,842 1,873 2,086 Earnings before income taxes 481 433 419 588 Net earnings 402 380 355 510 Net earnings per share of common stock: Basic $ 1.08 $ 1.02 $ 0.95 $ 1.36 Diluted $ 1.07 $ 1.00 $ 0.94 $ 1.34 Market price of common stock: High $ 107.95 $ 119.83 $ 123.55 $ 121.84 Low $ 86.68 $ 106.26 $ 109.75 $ 106.48 Dividends declared per share of common stock $ 0.38 $ 0.38 $ 0.38 $ 0.425 |
Segment and Geographic Data (Ta
Segment and Geographic Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Segment Results 2017 2016 2015 Orthopaedics $ 4,713 $ 4,422 $ 4,223 MedSurg 5,557 4,894 3,895 Neurotechnology & Spine 2,174 2,009 1,828 Net sales $ 12,444 $ 11,325 $ 9,946 Orthopaedics $ 337 $ 317 $ 290 MedSurg 315 249 117 Neurotechnology & Spine 142 140 132 Segment depreciation and amortization $ 794 $ 706 $ 539 Corporate and Other 65 46 51 Total depreciation and amortization $ 859 $ 752 $ 590 Orthopaedics $ 1,669 $ 1,597 $ 1,487 MedSurg 1,225 1,085 822 Neurotechnology & Spine 639 557 474 Segment operating income $ 3,533 $ 3,239 $ 2,783 Items not allocated to segments: Corporate and Other $ (402 ) $ (352 ) $ (302 ) Acquisition & integration-related charges (64 ) (131 ) (35 ) Amortization of intangible assets (371 ) (319 ) (210 ) Restructuring related-charges (194 ) (125 ) (132 ) Rejuvenate and related-charges (173 ) (158 ) (296 ) Regulatory and legal matters (39 ) 12 53 Consolidated operating income $ 2,290 $ 2,166 $ 1,861 |
Sales and Other Financial Information by Business Segment | Segment Assets and Capital Spending Assets: 2017 2016 2015 Orthopaedics $ 7,486 $ 7,048 $ 6,149 MedSurg 9,759 8,553 5,341 Neurotechnology & Spine 4,105 4,129 3,904 Total segment assets $ 21,350 $ 19,730 $ 15,394 Corporate and Other 847 705 829 Total assets $ 22,197 $ 20,435 $ 16,223 Capital spending: Orthopaedics $ 138 $ 153 $ 95 MedSurg 194 129 89 Neurotechnology & Spine 50 25 28 Total segment capital spending $ 382 $ 307 $ 212 Corporate and Other 216 183 58 Total capital spending $ 598 $ 490 $ 270 |
Geographic Information on Net Sales and Long-Lived Assets | Geographic Information Net Sales Net Property, Plant and Equipment 2017 2016 2015 2017 2016 United States $ 9,059 $ 8,230 $ 7,116 $ 1,102 $ 941 Europe, Middle East, Africa 1,567 1,437 1,267 718 493 Asia Pacific 1,413 1,325 1,251 107 105 Other countries 405 333 312 48 30 Total $ 12,444 $ 11,325 $ 9,946 $ 1,975 $ 1,569 |
Significant Accounting Polici34
Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2018 | |
Share-based compensation, excess tax benefit, amount | $ 57 | |||
Income taxes | 704 | $ (128) | $ (238) | |
Other financing, net | $ (33) | (6) | $ 6 | |
Accounting Standards Update 2016-09 | ||||
Income taxes | 36 | |||
Other financing, net | $ (36) | |||
Subsequent Event | Retained Earnings | Accounting Standards Update 2016-16 | ||||
Cumulative-effect adjustment on retained earnings | $ 696 | |||
Subsequent Event | Retained Earnings | Accounting Standards Update 2014-09 | ||||
Cumulative-effect adjustment on retained earnings | $ 55 | |||
Employee Stock Option | ||||
Vesting period | 10 years | |||
Restricted Stock Units (RSUs) | ||||
Performance period | 3 years | |||
Performance Stock Units (PSUs) | ||||
Vesting period | 3 years | |||
Minimum | ||||
Finite-lived intangible asset, useful life | 4 years | |||
Maximum | ||||
Finite-lived intangible asset, useful life | 40 years | |||
Building and Improvements | Minimum | ||||
Property, plant and equipment useful life | 3 years | |||
Building and Improvements | Maximum | ||||
Property, plant and equipment useful life | 30 years | |||
Machinery and Equipment | Minimum | ||||
Property, plant and equipment useful life | 3 years | |||
Machinery and Equipment | Maximum | ||||
Property, plant and equipment useful life | 10 years |
Fair Value Measurements (Valuat
Fair Value Measurements (Valuation Of Financial Instruments By Pricing Categories) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Assets | ||
Available-for-sale marketable securities: | $ 251 | $ 68 |
Total assets measured at fair value | 2,978 | 3,580 |
Contingent Consideration Arrangements, Change in Amount of Contingent Consideration [Abstract] | ||
Total liabilities measured at fair value | 190 | 198 |
(Level 1) | ||
Assets | ||
Available-for-sale marketable securities | 2,542 | 3,316 |
Total assets measured at fair value | 2,663 | 3,410 |
Liabilities: | ||
Deferred compensation arrangements | 121 | 94 |
Contingent Consideration Arrangements, Change in Amount of Contingent Consideration [Abstract] | ||
Total liabilities measured at fair value | 121 | 94 |
(Level 1) | Trading marketable securities | ||
Assets | ||
Trading marketable securities | 121 | 94 |
(Level 2) | ||
Assets | ||
Total assets measured at fair value | 315 | 170 |
Contingent Consideration Arrangements, Change in Amount of Contingent Consideration [Abstract] | ||
Total liabilities measured at fair value | 37 | 18 |
(Level 2) | Foreign currency exchange forward contracts | ||
Assets | ||
Foreign currency exchange forward contracts | 15 | 45 |
Interest rate swap asset | 15 | 45 |
Liabilities: | ||
Foreign currency exchange forward contracts | 37 | 18 |
(Level 2) | Interest rate swap asset | ||
Assets | ||
Foreign currency exchange forward contracts | 49 | 57 |
Interest rate swap asset | 49 | 57 |
(Level 2) | Available-for-sale marketable securities: | ||
Assets | ||
Available-for-sale marketable securities: | 251 | 68 |
(Level 2) | Available-for-sale marketable securities: | Corporate and asset-backed debt securities | ||
Assets | ||
Available-for-sale marketable securities: | 125 | 25 |
(Level 2) | Available-for-sale marketable securities: | Foreign government debt securities | ||
Assets | ||
Available-for-sale marketable securities: | 2 | 0 |
(Level 2) | Available-for-sale marketable securities: | United States agency debt securities | ||
Assets | ||
Available-for-sale marketable securities: | 27 | 9 |
(Level 2) | Available-for-sale marketable securities: | United States treasury debt securities | ||
Assets | ||
Available-for-sale marketable securities: | 70 | 16 |
(Level 2) | Available-for-sale marketable securities: | Certificates of deposit | ||
Assets | ||
Available-for-sale marketable securities: | 27 | 18 |
(Level 3) | ||
Contingent Consideration Arrangements, Change in Amount of Contingent Consideration [Abstract] | ||
Beginning | 86 | 56 |
Additions | 3 | 49 |
Change in estimate | 2 | (7) |
Settlements | (59) | (12) |
Ending | 32 | 86 |
Total liabilities measured at fair value | $ 32 | $ 86 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements (Available-For-Sale Securities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Due in one year or less | $ 107 | $ 36 |
Due after one year through three years | $ 144 | $ 32 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Marketable securities, gain (loss) | $ 60 | $ 29 | $ 14 |
Available-for-sale Securities [Member] | |||
Interest Receivable | $ 1 | $ 1 |
Fair Value Measurements (Unreal
Fair Value Measurements (Unrealized Losses And Fair Value Of Investments With Unrealized Losses) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Total, number of investments | 182 |
Total, fair value | $ 223 |
Corporate and Asset-Backed | |
Total, number of investments | 118 |
Total, fair value | $ 108 |
Foreign government | |
Total, number of investments | 1 |
Total, fair value | $ 2 |
United States Agency | |
Total, number of investments | 15 |
Total, fair value | $ 20 |
United States Treasury | |
Total, number of investments | 20 |
Total, fair value | $ 70 |
Certificate of Deposit | |
Total, number of investments | 28 |
Total, fair value | $ 23 |
Derivative Instruments (Forward
Derivative Instruments (Forward Currency Exchange Contracts) (Details) - Foreign currency exchange forward contracts - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Notional amount | $ 5,871 | $ 3,899 |
Maximum term | 548 days | 548 days |
Derivative, fair value, net | $ (21) | $ 27 |
Other current assets | ||
Derivative [Line Items] | ||
Derivative asset | 15 | 41 |
Other noncurrent assets | ||
Derivative [Line Items] | ||
Derivative asset | 1 | 4 |
Other current liabilities | ||
Derivative [Line Items] | ||
Derivative liability | (36) | (16) |
Other noncurrent liabilities | ||
Derivative [Line Items] | ||
Derivative liability | (1) | (2) |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Notional amount | 1,104 | 1,058 |
Derivative, fair value, net | 4 | 17 |
Designated as Hedging Instrument | Other current assets | ||
Derivative [Line Items] | ||
Derivative asset | 11 | 24 |
Designated as Hedging Instrument | Other noncurrent assets | ||
Derivative [Line Items] | ||
Derivative asset | 1 | 4 |
Designated as Hedging Instrument | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative liability | (7) | (9) |
Designated as Hedging Instrument | Other noncurrent liabilities | ||
Derivative [Line Items] | ||
Derivative liability | (1) | (2) |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Notional amount | 4,767 | 2,841 |
Derivative, fair value, net | (25) | 10 |
Not Designated as Hedging Instrument | Other current assets | ||
Derivative [Line Items] | ||
Derivative asset | 4 | 17 |
Not Designated as Hedging Instrument | Other noncurrent assets | ||
Derivative [Line Items] | ||
Derivative asset | 0 | 0 |
Not Designated as Hedging Instrument | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative liability | (29) | (7) |
Not Designated as Hedging Instrument | Other noncurrent liabilities | ||
Derivative [Line Items] | ||
Derivative liability | $ 0 | $ 0 |
Derivative Instruments (Narrati
Derivative Instruments (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Ineffectiveness on Foreign Currency Fair Value Hedges is Immaterial | 0 | |
Senior Unsecured Notes 3.375% due 2024 | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Proceeds from Unsecured Notes Payable | $ 600 | |
Foreign currency exchange forward contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount | 5,871 | $ 3,899 |
Foreign currency exchange forward contracts | Other noncurrent assets | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 1 | 4 |
Interest rate swap asset | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 0 |
Interest rate swap asset | Other noncurrent liabilities | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest Rate Cash Flow Hedge Liability at Fair Value | 44 | |
Interest rate swap asset | Other noncurrent assets | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 5 | 9 |
Interest rate swap asset | Long-term Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Asset, Fair Value, Gross Liability | 5 | 9 |
Designated as Hedging Instrument | Foreign currency exchange forward contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of designated net investment hedges | 30 | |
Gains on derivatives designated as hedges | 7 | 1 |
Notional amount | 1,104 | 1,058 |
Designated as Hedging Instrument | Foreign currency exchange forward contracts | Other noncurrent assets | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | 1 | 4 |
Designated as Hedging Instrument | Interest rate swap asset | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount | 600 | |
Designated as Hedging Instrument | Interest rate swap asset | Fair Value Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount | $ 500 | $ 500 |
Derivative Instruments (Movemen
Derivative Instruments (Movements out of OCI) (Details) - Foreign currency exchange forward contracts - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative [Line Items] | |||
Foreign currency transaction gains (losses) | $ (15) | $ (19) | $ (3) |
Cost of sales | |||
Derivative [Line Items] | |||
Foreign currency transaction gains (losses) | (6) | 0 | 19 |
Other income (expense), net | |||
Derivative [Line Items] | |||
Foreign currency transaction gains (losses) | $ (9) | $ (19) | $ (22) |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive (Loss) Income (AOCI) (Schedule of Amounts Recognized in Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Accumulated Other Comprehensive Income (Loss), Beginning of Period | $ (761) | $ (639) | |
OCI | 125 | (94) | |
Income taxes | 71 | (30) | |
Cost of Sales | 4,271 | 3,830 | $ 3,344 |
Other income | (227) | (245) | (126) |
Income taxes | 1,043 | 274 | 296 |
Other comprehensive income (loss) | 208 | (122) | (385) |
Accumulated Other Comprehensive Income (Loss), End of Period | (553) | (761) | (639) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Income taxes | (4) | (1) | |
Other comprehensive income (loss) | 208 | (122) | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cost of Sales | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Cost of Sales | 14 | 6 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Other income | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income | 2 | (3) | |
Marketable Securities | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Accumulated Other Comprehensive Income (Loss), Beginning of Period | 0 | 0 | |
OCI | (7) | 3 | |
Income taxes | 1 | (1) | |
Accumulated Other Comprehensive Income (Loss), End of Period | (4) | 0 | 0 |
Marketable Securities | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Income taxes | 0 | 1 | |
Other comprehensive income (loss) | (4) | 0 | |
Marketable Securities | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cost of Sales | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Cost of Sales | 0 | 0 | |
Marketable Securities | Reclassification out of Accumulated Other Comprehensive Income [Member] | Other income | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income | 2 | (3) | |
Pension Plans | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Accumulated Other Comprehensive Income (Loss), Beginning of Period | (132) | (119) | |
OCI | (27) | (20) | |
Income taxes | 19 | 3 | |
Accumulated Other Comprehensive Income (Loss), End of Period | (134) | (132) | (119) |
Pension Plans | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Income taxes | (2) | (2) | |
Other comprehensive income (loss) | (2) | (13) | |
Pension Plans | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cost of Sales | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Cost of Sales | 8 | 6 | |
Pension Plans | Reclassification out of Accumulated Other Comprehensive Income [Member] | Other income | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income | 0 | 0 | |
Hedges | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Accumulated Other Comprehensive Income (Loss), Beginning of Period | 24 | 4 | |
OCI | (4) | 35 | |
Income taxes | 4 | (15) | |
Accumulated Other Comprehensive Income (Loss), End of Period | 28 | 24 | 4 |
Hedges | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Income taxes | (2) | 0 | |
Other comprehensive income (loss) | 4 | 20 | |
Hedges | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cost of Sales | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Cost of Sales | 6 | 0 | |
Hedges | Reclassification out of Accumulated Other Comprehensive Income [Member] | Other income | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income | 0 | 0 | |
Financial Statement Translation | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Accumulated Other Comprehensive Income (Loss), Beginning of Period | (653) | (524) | |
OCI | 163 | (112) | |
Income taxes | 47 | (17) | |
Accumulated Other Comprehensive Income (Loss), End of Period | (443) | (653) | $ (524) |
Financial Statement Translation | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Income taxes | 0 | 0 | |
Other comprehensive income (loss) | 210 | (129) | |
Financial Statement Translation | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cost of Sales | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Cost of Sales | 0 | 0 | |
Financial Statement Translation | Reclassification out of Accumulated Other Comprehensive Income [Member] | Other income | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Other income | $ 0 | $ 0 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||||||||||||
Acquisitions, net of cash acquired | $ 831 | $ 4,332 | $ 153 | ||||||||||
Net sales | $ 3,471 | $ 3,006 | $ 3,012 | $ 2,955 | $ 3,157 | $ 2,833 | $ 2,840 | $ 2,495 | $ 12,444 | 11,325 | $ 9,946 | ||
Entellus Medical, Inc. | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Net sales | $ 75 | ||||||||||||
Entellus Medical, Inc. | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquisitions, net of cash acquired | $ 662 | ||||||||||||
Business acquisition, share price | $ 24 | $ 24 | $ 24 | ||||||||||
NOVADAQ Acquisition | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquisitions, net of cash acquired | $ 716 |
Acquisitions (Allocation Of The
Acquisitions (Allocation Of The Preliminary Purchase Price To The Acquired Net Assets Of Acquisitions) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 7,168 | $ 6,356 | $ 4,136 |
Weighted average life of intangible assets | 14 years | 15 years | |
Customer relationship | |||
Business Acquisition [Line Items] | |||
Weighted average life of intangible assets | 15 years | 15 years | |
Developed technology and patents | |||
Business Acquisition [Line Items] | |||
Weighted average life of intangible assets | 12 years | 14 years | |
NOVADAQ [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price paid | $ 716 | ||
Contingent consideration | 0 | ||
Total consideration | 716 | ||
Cash | 42 | ||
Accounts receivable | 11 | ||
Inventory | 39 | ||
Other assets | 9 | ||
Liabilities | (58) | ||
Goodwill | 521 | ||
Assets acquired and liabilities assumed, net | $ 716 | ||
Weighted average life of intangible assets | 14 years | ||
NOVADAQ [Member] | Customer relationship | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | $ 18 | ||
NOVADAQ [Member] | Trade name | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | 1 | ||
NOVADAQ [Member] | Developed technology and patents | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | 133 | ||
NOVADAQ [Member] | IPRD | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | $ 0 | ||
Sage Products [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price paid | $ 2,870 | ||
Contingent consideration | 5 | ||
Total consideration | 2,875 | ||
Cash | 91 | ||
Accounts receivable | 29 | ||
Inventory | 63 | ||
Other assets | 80 | ||
Liabilities | (83) | ||
Goodwill | 1,522 | ||
Assets acquired and liabilities assumed, net | $ 2,875 | ||
Weighted average life of intangible assets | 15 years | ||
Sage Products [Member] | Customer relationship | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | $ 930 | ||
Sage Products [Member] | Trade name | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | 70 | ||
Sage Products [Member] | Developed technology and patents | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | 173 | ||
Sage Products [Member] | IPRD | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | 0 | ||
Physio Acquisition [Domain] | |||
Business Acquisition [Line Items] | |||
Purchase price paid | 1,299 | ||
Contingent consideration | 0 | ||
Total consideration | 1,299 | ||
Cash | 32 | ||
Accounts receivable | 107 | ||
Inventory | 61 | ||
Other assets | 103 | ||
Liabilities | (364) | ||
Goodwill | 623 | ||
Assets acquired and liabilities assumed, net | $ 1,299 | ||
Weighted average life of intangible assets | 14 years | ||
Physio Acquisition [Domain] | Customer relationship | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | $ 344 | ||
Physio Acquisition [Domain] | Trade name | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | 160 | ||
Physio Acquisition [Domain] | Developed technology and patents | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | 226 | ||
Physio Acquisition [Domain] | IPRD | |||
Business Acquisition [Line Items] | |||
Business combination, acquired intangible assets | $ 7 |
Contingencies and Commitments45
Contingencies and Commitments (Narrative) (Details) $ in Millions | Jul. 12, 2017USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2010patent |
Payments for legal settlements | $ 54 | ||||||
Rent expense | $ 125 | $ 112 | $ 101 | ||||
Rejuvenate and ABG II Voluntary Recall | |||||||
Litigation liability | 232 | ||||||
Litigation liability net of insurance recoveries | 104 | ||||||
Rejuvenate and ABG II Voluntary Recall | Minimum | |||||||
Estimate of possible loss | 2,304 | ||||||
Rejuvenate and ABG II Voluntary Recall | Minimum | Insurance Settlement | |||||||
Estimate of possible loss | 2,072 | ||||||
Rejuvenate and ABG II Voluntary Recall | Maximum | |||||||
Estimate of possible loss | 2,539 | ||||||
Rejuvenate and ABG II Voluntary Recall | Maximum | Insurance Settlement | |||||||
Estimate of possible loss | $ 2,307 | ||||||
Zimmer Product Infringement | |||||||
Number of patents allegedly infringed upon | patent | 3 | ||||||
Gain contingency, damages awarded, value | $ 164 | $ 76 |
Contingencies and Commitments46
Contingencies and Commitments (Future Purchase Obligations and Minimum Lease Payments) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 600 |
2,019 | 1,250 |
2,020 | 500 |
2,021 | 750 |
2,022 | 0 |
Thereafter | 4,150 |
Purchase obligations | |
2,018 | 1,046 |
2,019 | 95 |
2,020 | 2 |
2,021 | 1 |
2,022 | 0 |
Thereafter | 0 |
Minimum lease payments | |
2,018 | 106 |
2,019 | 63 |
2,020 | 45 |
2,021 | 31 |
2,022 | 21 |
Thereafter | $ 60 |
Goodwill and Other Intangible47
Goodwill and Other Intangibles (Summary of the Company's Other Intangible Assets) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, impairment loss | $ 0 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 14 years | 15 years |
Gross Carrying Amount | $ 5,314,000,000 | $ 4,950,000,000 |
Less Accumulated Amortization | 1,837,000,000 | 1,442,000,000 |
Net Carrying Amount | $ 3,477,000,000 | $ 3,508,000,000 |
Developed technologies | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 12 years | 14 years |
Gross Carrying Amount | $ 2,416,000,000 | $ 2,091,000,000 |
Less Accumulated Amortization | 917,000,000 | 706,000,000 |
Net Carrying Amount | $ 1,499,000,000 | $ 1,385,000,000 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 15 years | 15 years |
Gross Carrying Amount | $ 2,088,000,000 | $ 2,049,000,000 |
Less Accumulated Amortization | 561,000,000 | 407,000,000 |
Net Carrying Amount | $ 1,527,000,000 | $ 1,642,000,000 |
Patents | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 10 years | 11 years |
Gross Carrying Amount | $ 340,000,000 | $ 317,000,000 |
Less Accumulated Amortization | 227,000,000 | 206,000,000 |
Net Carrying Amount | $ 113,000,000 | $ 111,000,000 |
Trademarks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 18 years | 18 years |
Gross Carrying Amount | $ 352,000,000 | $ 348,000,000 |
Less Accumulated Amortization | 84,000,000 | 59,000,000 |
Net Carrying Amount | 268,000,000 | 289,000,000 |
In-process research and development | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 25,000,000 | 30,000,000 |
Less Accumulated Amortization | 0 | 0 |
Net Carrying Amount | $ 25,000,000 | $ 30,000,000 |
Other | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 9 years | 12 years |
Gross Carrying Amount | $ 93,000,000 | $ 115,000,000 |
Less Accumulated Amortization | 48,000,000 | 64,000,000 |
Net Carrying Amount | $ 45,000,000 | $ 51,000,000 |
Goodwill and Other Intangible48
Goodwill and Other Intangibles (Changes in Net Carrying Amount of Goodwill by Segment) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | $ 6,356 | $ 4,136 |
Additions and adjustments | 664 | 2,330 |
Foreign exchange | 148 | (110) |
Goodwill, Ending balance | 7,168 | 6,356 |
Orthopaedics | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 2,372 | 2,344 |
Additions and adjustments | 2 | 72 |
Foreign exchange | 52 | (44) |
Goodwill, Ending balance | 2,426 | 2,372 |
MedSurg | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 2,934 | 782 |
Additions and adjustments | 553 | 2,196 |
Foreign exchange | 22 | (44) |
Goodwill, Ending balance | 3,509 | 2,934 |
Neuro and Spine | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning balance | 1,050 | 1,010 |
Additions and adjustments | 109 | 62 |
Foreign exchange | 74 | (22) |
Goodwill, Ending balance | $ 1,233 | $ 1,050 |
Goodwill and Other Intangible49
Goodwill and Other Intangibles (Estimated Amortization Expense) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,018 | $ 368 |
2,019 | 355 |
2,020 | 330 |
2,021 | 318 |
2,022 | $ 311 |
Capital Stock (Narrative) (Deta
Capital Stock (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 | |
Capital Stock [Line Items] | ||||
Common and Preferred Stock, shares authorized (in shares) | 1,000,500,000 | |||
Preferred Stock, Shares Authorized | 500,000 | |||
Preferred stock, par per share | $ 1 | |||
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | ||
Shares repurchased (in shares) | 1,900,000 | 100,000 | 7,400,000 | |
Repurchase and retirement of shares of common stock | $ 230 | |||
Remaining shares authorized to be repurchased | $ 1,640 | |||
Capital shares reserved for future issuance | 37,000,000 | 11,000,000 | ||
Aggregate intrinsic value of options exercised | $ 184 | $ 128 | $ 98 | |
Options exercised during period, exercise price range, lower range limit | $ 38.71 | |||
Options exercised during period, exercise price range, upper range limit | $ 154.87 | |||
Compensation cost not yet recognized | $ 90 | |||
Compensation cost not yet recognized, period for recognized | 1 year 7 months | |||
Restricted Stock Units (RSUs) | ||||
Capital Stock [Line Items] | ||||
Compensation cost not yet recognized | $ 56 | |||
Compensation cost not yet recognized, period for recognized | 1 year | |||
Weighted average grant date fair value, Granted (in dollars per share) | $ 117.44 | $ 94.70 | ||
Shares vested during the period | $ 44 | |||
Performance Stock Units (PSUs) | ||||
Capital Stock [Line Items] | ||||
Compensation cost not yet recognized | $ 13 | |||
Compensation cost not yet recognized, period for recognized | 1 year | |||
Weighted average grant date fair value, Granted (in dollars per share) | $ 122.41 | |||
Shares vested during the period | $ 0 | |||
Employee Stock Purchase Plans | ||||
Capital Stock [Line Items] | ||||
Percentage of closing stock price under ESPP | 95.00% | |||
Shares issued under the ESPP | 163,415 | 159,329 |
Capital Stock (Option Grant Ass
Capital Stock (Option Grant Assumptions) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Capital Stock [Abstract] | |||
Weighted-average fair value per share | $ 22.43 | $ 17.73 | $ 22.55 |
Risk-free interest rate | 2.00% | 1.30% | 1.80% |
Expected dividend yield | 1.50% | 1.60% | 1.60% |
Expected stock price volatility | 19.40% | 20.50% | 25.50% |
Expected option life (years) | 6 years | 6 years 1 month | 7 years 3 months |
Capital Stock (Summary of Stock
Capital Stock (Summary of Stock Option Activity) (Details) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Shares, Options outstanding at January 1 (in shares) | shares | 14.9 |
Shares, Granted (in shares) | shares | 2.9 |
Shares, Exercised (in shares) | shares | (2.5) |
Shares, Cancelled (in shares) | shares | (0.6) |
Shares, Options outstanding at December 31 (in shares) | shares | 14.7 |
Shares, Exercisable at December 31 (in shares) | shares | 7.5 |
Shares, Options expected to vest (in shares) | shares | 6.6 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted average exercise price, Options outstanding at January 1 (in dollars per share) | $ / shares | $ 73.14 |
Weighted average exercise price, Granted (in dollars per share) | $ / shares | 122.66 |
Weighted average exercise price, Exercised (in dollars per share) | $ / shares | 62.66 |
Weighted average exercise price, Cancelled (in dollars per share) | $ / shares | 97.87 |
Weighted average exercise price, Options outstanding at December 31 (in dollars per share) | $ / shares | 83.71 |
Weighted average exercise price, Exercisable at December 31 (in dollars per share) | $ / shares | 65.47 |
Weighted average exercise price, Options expected to vest (in dollars per share) | $ / shares | $ 101.83 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Weighted-average remaining contractual term, Options outstanding at December 31 (in years) | 5 years 5 months |
Weighted-average remaining contractual term, Exercisable at December 31 (in years) | 4 years 2 months |
Weighted-average remaining contractual term, Options expected to vest (in years) | 7 years 11 months |
Aggregate intrinsic value, Options outstanding at December 31 | $ | $ 956.5 |
Aggregate intrinsic value, Exercisable at December 31 | $ | 666.8 |
Aggregate intrinsic value, Options expected to vest | $ | $ 347.9 |
Capital Stock (Summary of RSU a
Capital Stock (Summary of RSU and PSU Activity) (Details) - $ / shares shares in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Shares, Nonvested at January 1 (in shares) | 1.1 | |
Shares, Granted (in shares) | 0.5 | |
Shares, Vested (in shares) | (0.5) | |
Shares, Cancelled (in shares) | (0.1) | |
Shares, Nonvested at December 31 (in shares) | 1 | 1.1 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Weighted average grant date fair value, Outstanding at January 1 (in dollars per share) | $ 90.10 | |
Weighted average grant date fair value, Granted (in dollars per share) | 117.44 | $ 94.70 |
Weighted average grant date fair value, Vested (in dollars per share) | 87.08 | |
Weighted average grant date fair value, Cancelled (in dollars per share) | 102.01 | |
Weighted average grant date fair value, Outstanding at December 31 (in dollars per share) | $ 104.85 | $ 90.10 |
Performance Stock Units (PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Shares, Nonvested at January 1 (in shares) | 0.3 | |
Shares, Granted (in shares) | 0.1 | |
Shares, Vested (in shares) | (0.1) | |
Shares, Cancelled (in shares) | 0 | |
Shares, Nonvested at December 31 (in shares) | 0.3 | 0.3 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Weighted average grant date fair value, Outstanding at January 1 (in dollars per share) | $ 91.19 | |
Weighted average grant date fair value, Granted (in dollars per share) | 122.41 | |
Weighted average grant date fair value, Vested (in dollars per share) | 81.14 | |
Weighted average grant date fair value, Cancelled (in dollars per share) | 92.18 | |
Weighted average grant date fair value, Outstanding at December 31 (in dollars per share) | $ 104.51 | $ 91.19 |
Debt and Credit Facilities (Nar
Debt and Credit Facilities (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 31, 2017 | |
Line of Credit Facility [Line Items] | ||||
Commercial Paper | $ 0 | $ 200,000,000 | ||
Interest expense, debt | $ 247,000,000 | $ 228,000,000 | $ 108,000,000 | |
Senior Unsecured Notes 1.800% due 2019 | ||||
Line of Credit Facility [Line Items] | ||||
Unsecured Debt | $ 500,000,000 | |||
Stated interest rate | 1.80% | |||
Commercial Paper | ||||
Line of Credit Facility [Line Items] | ||||
Maturities of time deposits | 397 days | |||
Commercial Paper | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Commercial paper | $ 1,500,000,000 |
Debt and Credit Facilities (Mat
Debt and Credit Facilities (Maturities Of Long-Term Debt Disclosures) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Commercial Paper | $ 0 | $ 200,000,000 |
Total debt | 7,222,000,000 | 6,914,000,000 |
Current maturities of debt | 632,000,000 | 228,000,000 |
Total Long-term Debt | 6,590,000,000 | 6,686,000,000 |
Unamortized debt issuance costs | 39,000,000 | 45,000,000 |
Borrowing capacity on existing facilities | 1,547,000,000 | 1,551,000,000 |
Fair value of senior unsecured notes | $ 7,521,000,000 | 6,762,000,000 |
Senior Unsecured Notes 1.30% due 2018 | ||
Stated interest rate | 1.30% | |
Maturity date | Apr. 1, 2018 | |
Unsecured Debt | $ 600,000,000 | 598,000,000 |
Senior Unsecured Notes 1.800% due 2019 | ||
Stated interest rate | 1.80% | |
Maturity date | Jan. 15, 2019 | |
Unsecured Debt | $ 499,000,000 | 0 |
Senior Unsecured Notes 2.000% due 2019 | ||
Stated interest rate | 2.00% | |
Maturity date | Mar. 8, 2019 | |
Unsecured Debt | $ 748,000,000 | 746,000,000 |
Senior Unsecured Notes 4.375% Due 2020 | ||
Stated interest rate | 4.375% | |
Maturity date | Jan. 15, 2020 | |
Unsecured Debt | $ 498,000,000 | 497,000,000 |
Senior Unsecured Notes 2.625% due 2021 | ||
Stated interest rate | 2.625% | |
Maturity date | Mar. 15, 2021 | |
Unsecured Debt | $ 746,000,000 | 745,000,000 |
Senior Unsecured Notes 3.375% due 2024 | ||
Stated interest rate | 3.375% | |
Maturity date | May 15, 2024 | |
Unsecured Debt | $ 598,000,000 | 602,000,000 |
Senior Unsecured Notes 3.375% due 2025 | ||
Stated interest rate | 3.375% | |
Maturity date | Nov. 1, 2025 | |
Unsecured Debt | $ 745,000,000 | 744,000,000 |
Senior Unsecured Notes 3.50% due 2026 | ||
Stated interest rate | 3.50% | |
Maturity date | Mar. 15, 2026 | |
Unsecured Debt | $ 988,000,000 | 987,000,000 |
Senior Unsecured Notes 4.10% due 2043 | ||
Stated interest rate | 4.10% | |
Maturity date | Apr. 1, 2043 | |
Unsecured Debt | $ 391,000,000 | 391,000,000 |
Senior Unsecured Notes 4.375% due 2044 | ||
Stated interest rate | 4.375% | |
Maturity date | May 15, 2044 | |
Unsecured Debt | $ 394,000,000 | 395,000,000 |
Senior Unsecured Notes 4.625% due 2046 | ||
Stated interest rate | 4.625% | |
Maturity date | Mar. 15, 2046 | |
Unsecured Debt | $ 980,000,000 | 979,000,000 |
Other | ||
Unsecured Debt | $ 35,000,000 | $ 30,000,000 |
Income Taxes Income Taxes (Narr
Income Taxes Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Contingency [Line Items] | |||
Effective income tax, percent | 50.60% | 14.30% | 17.10% |
Interest expense and penalties included in other income (expense), net | $ (28) | $ (1) | $ (4) |
Net operating loss carryforward recognized | 32 | 28 | $ 79 |
Accrued interest and penalties | 60 | 34 | |
Operating loss carryforwards | 219 | ||
Reinvestment of future remittances of undistributed earnings of foreign subsidiaries | 8,484 | ||
Unrecognized tax benefits, interest on income tax expense | 232 | $ 209 | |
United States | |||
Income Tax Contingency [Line Items] | |||
Operating loss carryforwards | 106 | ||
Foreign Tax Authority | |||
Income Tax Contingency [Line Items] | |||
Operating loss carryforwards | 113 | ||
Operating loss carryforwards, valuation allowance | 36 | ||
Tax credit carryforward, amount | 43 | ||
Tax credit carryforward, valuation allowance | $ 40 |
Income Taxes (Schedule of Recon
Income Taxes (Schedule of Reconciliation of U.S. Statutory Income Tax Rate to Company's Effective Income Tax Rate from Continuing Operations) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
United States federal statutory rate | 35.00% | 35.00% | 35.00% |
United States state and local income taxes, less federal deduction | 1.20% | 1.70% | 2.10% |
International operations | (21.00%) | (22.20%) | (17.60%) |
Tax Cuts and Jobs Act of 2017 transition tax | 38.00% | 0.00% | 0.00% |
Tax Cuts and Jobs Act of 2017 deferred tax changes | 2.30% | 0.00% | 0.00% |
Tax related to repatriation of foreign earnings | (0.00%) | (0.30%) | (3.90%) |
Other | (4.90%) | 0.10% | 1.50% |
Effective income tax rate, total | 50.60% | 14.30% | 17.10% |
Income Taxes (Schedule of Earni
Income Taxes (Schedule of Earnings before Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
United States | $ 499 | $ 542 | $ 475 | ||||||||
International | 1,564 | 1,379 | 1,260 | ||||||||
Earnings before income taxes | $ 649 | $ 471 | $ 444 | $ 499 | $ 588 | $ 419 | $ 433 | $ 481 | $ 2,063 | $ 1,921 | $ 1,735 |
Income Taxes (Schedule of Provi
Income Taxes (Schedule of Provision for Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current income tax expense: | |||
United States federal | $ 836 | $ 94 | $ 78 |
United States state and local | 38 | 50 | 23 |
International | 133 | 176 | 108 |
Total current income tax expense | 1,007 | 320 | 209 |
Deferred income tax expense (benefit): | |||
United States federal | 84 | (17) | 2 |
United States state and local | (9) | (12) | 8 |
International | (39) | (17) | 77 |
Total deferred income tax expense (benefit) | 36 | (46) | 87 |
Total income tax expense | $ 1,043 | $ 274 | $ 296 |
Income Taxes (Schedule of Diffe
Income Taxes (Schedule of Difference in Income Tax Effects Comprising Company's Deferred Income Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred income tax assets: | ||
Inventories | $ 480 | $ 583 |
Product-related liabilities | 34 | 115 |
Other accrued expenses | 204 | 248 |
State income taxes | 46 | 52 |
Share-based compensation | 46 | 80 |
Net operating loss carryforwards | 52 | 74 |
Other | 105 | 117 |
Total deferred income tax assets | 967 | 1,269 |
Less valuation allowances | (49) | (51) |
Net deferred income tax assets | 918 | 1,218 |
Deferred income tax liabilities: | ||
Depreciation and amortization | (598) | (871) |
Undistributed earnings | (81) | (50) |
Other | (3) | (50) |
Total deferred income tax liabilities | (682) | (971) |
Net deferred income tax assets | 236 | 247 |
Noncurrent assets—Other | 283 | 302 |
Noncurrent liabilities—Other liabilities | $ (47) | $ (55) |
Income Taxes (Schedule of Unres
Income Taxes (Schedule of Unresolved Income Tax Positions) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning uncertain tax positions | $ 287 | $ 313 |
Increases related to current year income tax positions | 123 | 47 |
Increases related to prior year income tax positions | 131 | 22 |
Settlements and resolutions of income tax audits | (9) | (82) |
Statute of limitations expirations | (4) | (9) |
Foreign currency translation | (4) | |
Foreign currency translation | 12 | |
Ending uncertain tax positions | 540 | 287 |
Ending uncertain tax positions | $ 287 | $ 313 |
Retirement Plans (Schedule of D
Retirement Plans (Schedule of Defined Contribution Plan Disclosures) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Benefits [Abstract] | |||
Plan expense | $ 181 | $ 166 | $ 148 |
Expense funded with Stryker common stock | 25 | 22 | 20 |
Stryker common stock held by plan, amount | $ 353 | $ 272 | $ 203 |
Stryker common stock held by plan, shares | 2.3 | 2.3 | 2.2 |
Stryker common stock held by plan, value as a percentage of total plan assets | 11.00% | 11.00% | 11.00% |
Retirement Plans (Schedule of F
Retirement Plans (Schedule of Funded Status and Components of the Amounts Recognized in the Consolidated Balance Sheets and in Accumulated Other Comprehensive Gain (Loss), Before the Effect of Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of Net Periodic Pension Cost | |||
Service cost | $ (42) | $ (33) | $ (36) |
Interest cost | (10) | (11) | (10) |
Expected return on plan assets | 11 | 10 | 11 |
Amortization of prior service cost and transition amount | 1 | 1 | 1 |
Recognized actuarial loss | (9) | (9) | (13) |
Net periodic benefit cost | (49) | (42) | (47) |
Net actuarial gain (loss) | (25) | (26) | 26 |
Recognized net actuarial loss | 9 | 9 | 13 |
Prior service cost and transition amount | (1) | (1) | (1) |
Total recognized in OCI | (17) | (18) | 38 |
Total recognized in net periodic benefit cost and OCI | $ (66) | $ (60) | $ (9) |
Defined Benefit Plan, Assumptions Used in Calculations [Abstract] | |||
Discount rate | 1.80% | 2.10% | 2.00% |
Expected return on plan assets | 3.30% | 3.60% | 4.00% |
Expected return on plan assets | 2.80% | 2.30% | 2.90% |
Weighted-average discount rate used to determine projected benefit obligations | 1.80% | 1.80% | 2.10% |
Defined Benefit Plan, Information about Plan Assets [Abstract] | |||
Fair value of plan assets | $ 370 | $ 308 | |
Benefit obligations | (708) | (588) | $ (529) |
Funded status | (338) | (280) | |
Current liabilities—accrued compensation | (2) | (1) | |
Noncurrent liabilities—other liabilities | (336) | (279) | |
Unrecognized net actuarial loss | (177) | (160) | |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member] | |||
Defined Benefit Plan, Information about Plan Assets [Abstract] | |||
Unrecognized prior service credit | 12 | 11 | |
Unrecognized net actuarial loss | $ (189) | $ (171) |
Retirement Plans (Narrative) (D
Retirement Plans (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Estimated net actuarial loss for the defined benefit pension plan | $ 9 | |
Estimated amortization of prior service credit and transition asset to be reclassified from AOCI | 1 | |
Actual return | 21 | $ 20 |
Estimated future employer contributions in next fiscal year | 24 | |
Other | (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actual return | $ 11 |
Retirement Plans (Schedule of C
Retirement Plans (Schedule of Change in Benefit Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Beginning projected benefit obligations | $ 588 | $ 529 | |
Service cost | 42 | 33 | $ 36 |
Interest cost | 10 | 11 | 10 |
Foreign exchange impact | 60 | (18) | |
Employee contributions | 6 | 6 | |
Actuarial losses | 19 | 40 | |
Acquisition | 0 | 7 | |
Benefits paid | (17) | (20) | |
Ending projected benefit obligations | 708 | 588 | $ 529 |
Ending accumulated benefit obligations | $ 675 | $ 560 |
Retirement Plans (Change in Pla
Retirement Plans (Change in Plan Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Beginning fair value of plan assets | $ 308 | $ 289 |
Actual return | 21 | 20 |
Employer contributions | 23 | 18 |
Employee contributions | 6 | 6 |
Foreign exchange impact | 26 | (9) |
Acquisition | 0 | 2 |
Benefits paid | (14) | (18) |
Ending fair value of plan assets | $ 370 | $ 308 |
Retirement Plans (Schedule of T
Retirement Plans (Schedule of Target and Actual Allocation of Plan Assets) (Details) | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocations | 100.00% | |
Actual plan asset allocations | 100.00% | 100.00% |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocations | 26.00% | |
Actual plan asset allocations | 28.00% | 28.00% |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocations | 45.00% | |
Actual plan asset allocations | 45.00% | 50.00% |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target plan asset allocations | 29.00% | |
Actual plan asset allocations | 27.00% | 22.00% |
Retirement Plans (Schedule of V
Retirement Plans (Schedule of Valuation of the Company's Pension Plan Assets by Pricing Categories) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 370 | $ 308 |
(Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 289 | 240 |
(Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 32 | 30 |
(Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 49 | 38 |
Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 4 | 7 |
Cash and cash equivalents | (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 4 | 7 |
Cash and cash equivalents | (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Cash and cash equivalents | (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 121 | 100 |
Equity securities | (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 104 | 83 |
Equity securities | (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 17 | 17 |
Equity securities | (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Corporate debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 34 | 127 |
Corporate debt securities | (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 33 | 127 |
Corporate debt securities | (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 1 | 0 |
Corporate debt securities | (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 211 | 74 |
Other | (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 148 | 23 |
Other | (Level 2) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 14 | 13 |
Other | (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 49 | $ 38 |
Retirement Plans (Expected Bene
Retirement Plans (Expected Benefit Payments) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Retirement Benefits [Abstract] | |
2,018 | $ 18 |
2,019 | 17 |
2,020 | 17 |
2,021 | 17 |
2,022 | 17 |
2023-2027 | $ 101 |
Summary of Quarterly Data (Un70
Summary of Quarterly Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |||||||||||
Net sales | $ 3,471 | $ 3,006 | $ 3,012 | $ 2,955 | $ 3,157 | $ 2,833 | $ 2,840 | $ 2,495 | $ 12,444 | $ 11,325 | $ 9,946 |
Gross profit | 2,239 | 1,982 | 1,990 | 1,962 | 2,086 | 1,873 | 1,842 | 1,694 | 8,173 | 7,495 | 6,602 |
Earnings before income taxes | 649 | 471 | 444 | 499 | 588 | 419 | 433 | 481 | 2,063 | 1,921 | 1,735 |
Net earnings | $ (249) | $ 434 | $ 391 | $ 444 | $ 510 | $ 355 | $ 380 | $ 402 | $ 1,020 | $ 1,647 | $ 1,439 |
Basic net earnings per share of common stock (in dollars per share) | $ (0.66) | $ 1.16 | $ 1.04 | $ 1.19 | $ 1.36 | $ 0.95 | $ 1.02 | $ 1.08 | $ 2.73 | $ 4.40 | $ 3.82 |
Diluted net earnings per share of common stock (in dollars per share) | (0.66) | 1.14 | 1.03 | 1.17 | 1.34 | 0.94 | 1 | 1.07 | $ 2.68 | $ 4.35 | $ 3.78 |
Market Price Of Common Stock, High (in dollars per share) | 160.62 | 148.84 | 145.62 | 133.59 | 121.84 | 123.55 | 119.83 | 107.95 | |||
Market Price Of Common Stock, Low (in dollars per share) | 141.68 | 137.70 | 129.82 | 116.50 | 106.48 | 109.75 | 106.26 | 86.68 | |||
Dividends declared per share of common stock | $ 0.470 | $ 0.425 | $ 0.425 | $ 0.425 | $ 0.425 | $ 0.38 | $ 0.380 | $ 0.380 |
Segment and Geographic Data (Sa
Segment and Geographic Data (Sales And Other Financial Information By Business Segment) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of Reportable Segments | segment | 3 | ||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 3,471 | $ 3,006 | $ 3,012 | $ 2,955 | $ 3,157 | $ 2,833 | $ 2,840 | $ 2,495 | $ 12,444 | $ 11,325 | $ 9,946 |
Depreciation and amortization | 859 | 752 | 590 | ||||||||
Segment net earnings (loss) | 2,290 | 2,166 | 1,861 | ||||||||
Amortization of intangible assets | (371) | (319) | (210) | ||||||||
Net earnings | $ (249) | $ 434 | $ 391 | $ 444 | $ 510 | $ 355 | $ 380 | $ 402 | 1,020 | 1,647 | 1,439 |
Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation and amortization | 794 | 706 | 539 | ||||||||
Segment operating income | 3,533 | 3,239 | 2,783 | ||||||||
Operating Segments | Orthopaedics | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 4,713 | 4,422 | 4,223 | ||||||||
Depreciation and amortization | 337 | 317 | 290 | ||||||||
Segment net earnings (loss) | 1,669 | 1,597 | 1,487 | ||||||||
Operating Segments | MedSurg | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 5,557 | 4,894 | 3,895 | ||||||||
Depreciation and amortization | 315 | 249 | 117 | ||||||||
Segment net earnings (loss) | 1,225 | 1,085 | 822 | ||||||||
Operating Segments | Neuro and Spine | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 2,174 | 2,009 | 1,828 | ||||||||
Depreciation and amortization | 142 | 140 | 132 | ||||||||
Segment net earnings (loss) | 639 | 557 | 474 | ||||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation and amortization | 65 | 46 | 51 | ||||||||
Segment Reconciling Items | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment operating income | (402) | (352) | (302) | ||||||||
Acquisition & integration-related charges | (64) | (131) | (35) | ||||||||
Amortization of intangible assets | (371) | (319) | (210) | ||||||||
Restructuring related-charges | (194) | (125) | (132) | ||||||||
Rejuvenate and related-charges | (173) | (158) | (296) | ||||||||
Regulatory and legal matters | (39) | 12 | 53 | ||||||||
Net earnings | $ 2,290 | $ 2,166 | $ 1,861 |
Segment and Geographic Data Seg
Segment and Geographic Data Segment and Geographic Data (Segment Information) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Assets | $ 22,197 | $ 20,435 | $ 16,223 |
Capital Expenditures During Period | 598 | 490 | 270 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Assets | 21,350 | 19,730 | 15,394 |
Capital Expenditures During Period | 382 | 307 | 212 |
Operating Segments | Orthopaedics | |||
Segment Reporting Information [Line Items] | |||
Assets | 7,486 | 7,048 | 6,149 |
Capital Expenditures During Period | 138 | 153 | 95 |
Operating Segments | MedSurg | |||
Segment Reporting Information [Line Items] | |||
Assets | 9,759 | 8,553 | 5,341 |
Capital Expenditures During Period | 194 | 129 | 89 |
Operating Segments | Neuro and Spine | |||
Segment Reporting Information [Line Items] | |||
Assets | 4,105 | 4,129 | 3,904 |
Capital Expenditures During Period | 50 | 25 | 28 |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Assets | 847 | 705 | 829 |
Capital Expenditures During Period | $ 216 | $ 183 | $ 58 |
Segment and Geographic Data (Ge
Segment and Geographic Data (Geographic Information on Net Sales and Long-Lived Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 3,471 | $ 3,006 | $ 3,012 | $ 2,955 | $ 3,157 | $ 2,833 | $ 2,840 | $ 2,495 | $ 12,444 | $ 11,325 | $ 9,946 |
Net Property, Plant & Equipment | 1,975 | 1,569 | 1,975 | 1,569 | |||||||
United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 9,059 | 8,230 | 7,116 | ||||||||
Net Property, Plant & Equipment | 1,102 | 941 | 1,102 | 941 | |||||||
Europe, Middle East, Africa | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 1,567 | 1,437 | 1,267 | ||||||||
Net Property, Plant & Equipment | 718 | 493 | 718 | 493 | |||||||
Asia Pacific | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 1,413 | 1,325 | 1,251 | ||||||||
Net Property, Plant & Equipment | 107 | 105 | 107 | 105 | |||||||
Other foreign countries | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 405 | 333 | $ 312 | ||||||||
Net Property, Plant & Equipment | $ 48 | $ 30 | $ 48 | $ 30 |