Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2021shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2021 |
Document Transition Report | false |
Entity File Number | 001-13149 |
Entity Registrant Name | STRYKER CORP |
Entity Incorporation, State or Country Code | MI |
Entity Tax Identification Number | 38-1239739 |
Entity Address, Address Line One | 2825 Airview Boulevard |
Entity Address, City or Town | Kalamazoo, |
Entity Address, State or Province | MI |
Entity Address, Postal Zip Code | 49002 |
City Area Code | (269) |
Local Phone Number | 385-2600 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 377,096,272 |
Amendment Flag | false |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q2 |
Entity Central Index Key | 0000310764 |
Current Fiscal Year End Date | --12-31 |
Common Stock | |
Document Information [Line Items] | |
Title of each class | Common Stock, $.10 Par Value |
Trading Symbol | SYK |
Security Exchange Name | NYSE |
Senior Unsecured Notes 1.125% due 2021 | |
Document Information [Line Items] | |
Title of each class | 1.125% Notes due 2023 |
Trading Symbol | SYK23 |
Security Exchange Name | NYSE |
Senior Unsecured Notes, 0.250% Due 2024 | |
Document Information [Line Items] | |
Title of each class | 0.250% Notes due 2024 |
Trading Symbol | SYK24A |
Security Exchange Name | NYSE |
Senior Unsecured Notes 2.125% due 2027 | |
Document Information [Line Items] | |
Title of each class | 2.125% Notes due 2027 |
Trading Symbol | SYK27 |
Security Exchange Name | NYSE |
Senior Unsecured Notes, 0.750% Due 2029 | |
Document Information [Line Items] | |
Title of each class | 0.750% Notes due 2029 |
Trading Symbol | SYK29 |
Security Exchange Name | NYSE |
Senior Unsecured Notes 2.625% due 2030 | |
Document Information [Line Items] | |
Title of each class | 2.625% Notes due 2030 |
Trading Symbol | SYK30 |
Security Exchange Name | NYSE |
Senior Unsecured Notes, 1.000% Due 2031 | |
Document Information [Line Items] | |
Title of each class | 1.000% Notes due 2031 |
Trading Symbol | SYK31 |
Security Exchange Name | NYSE |
Consolidated Statements Of Earn
Consolidated Statements Of Earnings (Loss) (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 4,294 | $ 2,764 | $ 8,247 | $ 6,352 |
Cost of sales | 1,522 | 1,216 | 2,966 | 2,473 |
Gross profit | 2,772 | 1,548 | 5,281 | 3,879 |
Research, development and engineering expenses | 310 | 233 | 598 | 487 |
Selling, general and administrative expenses | 1,505 | 1,225 | 3,080 | 2,555 |
Recall charges | 76 | 0 | 82 | (6) |
Amortization of intangible assets | 149 | 110 | 330 | 228 |
Total operating expenses | 2,040 | 1,568 | 4,090 | 3,264 |
Operating income (loss) | 732 | (20) | 1,191 | 615 |
Other income (expense), net | (70) | (67) | (162) | (112) |
Earnings (loss) before income taxes | 662 | (87) | 1,029 | 503 |
Income taxes | 70 | (4) | 135 | 93 |
Net earnings (loss) | $ 592 | $ (83) | $ 894 | $ 410 |
Net earnings (loss) per share of common stock: | ||||
Basic | $ 1.57 | $ (0.22) | $ 2.37 | $ 1.09 |
Diluted | $ 1.55 | $ (0.22) | $ 2.34 | $ 1.08 |
Weighted-average shares outstanding (in millions): | ||||
Basic | 376.9 | 375.5 | 376.6 | 375.1 |
Effect of dilutive employee stock compensation | 5.4 | 0 | 5.4 | 4.8 |
Diluted | 382.3 | 375.5 | 382 | 379.9 |
Cash dividends declared per share of common stock (in dollars per share) | $ 0.63 | $ 0.575 | $ 1.26 | $ 1.15 |
Anti-dilutive shares excluded from calculation of dilutive employee stock options | 4.3 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | $ 592 | $ (83) | $ 894 | $ 410 |
Other comprehensive income (loss), net of tax: | ||||
Pension plans | (4) | (4) | 3 | (8) |
Unrealized gains (losses) on designated hedges | 8 | (30) | 36 | (56) |
Financial statement translation | (80) | (58) | 175 | (45) |
Total other comprehensive income (loss), net of tax | (76) | (92) | 214 | (109) |
Comprehensive income (loss) | $ 516 | $ (175) | $ 1,108 | $ 301 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 2,241 | $ 2,943 |
Marketable securities | 84 | 81 |
Accounts receivable, less allowance of $141 ($131 in 2020) | 2,714 | 2,701 |
Inventories: | ||
Materials and supplies | 658 | 678 |
Work in process | 264 | 251 |
Finished goods | 2,509 | 2,565 |
Total inventories | 3,431 | 3,494 |
Prepaid expenses and other current assets | 562 | 488 |
Total current assets | 9,032 | 9,707 |
Property, plant and equipment: | ||
Land, buildings and improvements | 1,607 | 1,546 |
Machinery and equipment | 3,755 | 3,636 |
Total property, plant and equipment | 5,362 | 5,182 |
Less accumulated depreciation | 2,624 | 2,430 |
Property, plant and equipment, net | 2,738 | 2,752 |
Goodwill | 12,802 | 12,778 |
Other intangibles, net | 5,261 | 5,554 |
Noncurrent deferred income tax assets | 1,751 | 1,530 |
Other noncurrent assets | 2,114 | 2,009 |
Total assets | 33,698 | 34,330 |
Current liabilities | ||
Accounts payable | 864 | 810 |
Accrued compensation | 890 | 925 |
Income taxes | 300 | 207 |
Dividends payable | 238 | 237 |
Accrued product liabilities | 444 | 515 |
Accrued expenses and other liabilities | 1,510 | 1,586 |
Current maturities of debt | 6 | 761 |
Total current liabilities | 4,252 | 5,041 |
Long-term debt, excluding current maturities | 12,734 | 13,230 |
Income taxes | 927 | 990 |
Other noncurrent liabilities | 1,965 | 1,985 |
Total liabilities | 19,878 | 21,246 |
Shareholders' equity | ||
Common stock, $0.10 par value | 38 | 38 |
Additional paid-in capital | 1,844 | 1,741 |
Retained earnings | 12,881 | 12,462 |
Accumulated other comprehensive loss | (943) | (1,157) |
Total shareholders' equity | 13,820 | 13,084 |
Total liabilities and shareholders' equity | $ 33,698 | $ 34,330 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 141 | $ 131 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity (Unaudited) - 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 |
Beginning balance at Dec. 31, 2019 | $ 37 | $ 1,628 | $ 11,748 | $ (606) | |||
Beginning balance (in shares) at Dec. 31, 2019 | 374.5 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under stock compensation and benefit plans | $ 1 | (8) | |||||
Issuance of common stock under stock option and benefit plans (in shares) | 1.1 | ||||||
Repurchase of common stock | $ 0 | 0 | 0 | ||||
Repurchase of common stock (in shares) | 0 | ||||||
Share-based compensation | 86 | ||||||
Net earnings (loss) | $ 410 | 410 | |||||
Cash dividends declared | (433) | ||||||
Other comprehensive income (loss) | (109) | (109) | |||||
Ending balance at Jun. 30, 2020 | 12,754 | $ 12,754 | $ 38 | 1,706 | 11,725 | (715) | $ 0 |
Ending balance (in shares) at Jun. 30, 2020 | 375.6 | ||||||
Beginning balance at Mar. 31, 2020 | $ 38 | 1,676 | 12,024 | (623) | |||
Beginning balance (in shares) at Mar. 31, 2020 | 375.4 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under stock compensation and benefit plans | $ 0 | 0 | |||||
Issuance of common stock under stock option and benefit plans (in shares) | 0.2 | ||||||
Repurchase of common stock | $ 0 | 0 | 0 | ||||
Repurchase of common stock (in shares) | 0 | ||||||
Share-based compensation | 30 | ||||||
Net earnings (loss) | (83) | (83) | |||||
Cash dividends declared | (216) | ||||||
Other comprehensive income (loss) | (92) | (92) | |||||
Ending balance at Jun. 30, 2020 | 12,754 | 12,754 | $ 38 | 1,706 | 11,725 | (715) | 0 |
Ending balance (in shares) at Jun. 30, 2020 | 375.6 | ||||||
Beginning balance at Dec. 31, 2020 | 13,084 | $ 38 | 1,741 | 12,462 | (1,157) | ||
Beginning balance (in shares) at Dec. 31, 2020 | 376.1 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under stock compensation and benefit plans | $ 0 | (4) | |||||
Issuance of common stock under stock option and benefit plans (in shares) | 1 | ||||||
Repurchase of common stock | $ 0 | 0 | 0 | ||||
Repurchase of common stock (in shares) | 0 | ||||||
Share-based compensation | 107 | ||||||
Net earnings (loss) | 894 | 894 | |||||
Cash dividends declared | (475) | ||||||
Other comprehensive income (loss) | 214 | 214 | |||||
Ending balance at Jun. 30, 2021 | 13,820 | 13,820 | $ 38 | 1,844 | 12,881 | (943) | 0 |
Ending balance (in shares) at Jun. 30, 2021 | 377.1 | ||||||
Beginning balance at Mar. 31, 2021 | $ 38 | 1,806 | 12,525 | (867) | |||
Beginning balance (in shares) at Mar. 31, 2021 | 376.7 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under stock compensation and benefit plans | $ 0 | (1) | |||||
Issuance of common stock under stock option and benefit plans (in shares) | 0.4 | ||||||
Repurchase of common stock | $ 0 | 0 | 0 | ||||
Repurchase of common stock (in shares) | 0 | ||||||
Share-based compensation | 39 | ||||||
Net earnings (loss) | 592 | 592 | |||||
Cash dividends declared | (236) | ||||||
Other comprehensive income (loss) | (76) | (76) | |||||
Ending balance at Jun. 30, 2021 | $ 13,820 | $ 13,820 | $ 38 | $ 1,844 | $ 12,881 | $ (943) | $ 0 |
Ending balance (in shares) at Jun. 30, 2021 | 377.1 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating activities | ||
Net earnings (loss) | $ 894 | $ 410 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation | 187 | 163 |
Amortization of intangible assets | 330 | 228 |
Asset impairments | 3 | 161 |
Share-based compensation | 107 | 86 |
Recall charges | 82 | (6) |
Sale of inventory stepped-up to fair value at acquisition | 137 | 9 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (24) | 671 |
Inventories | (128) | (181) |
Accounts payable | 57 | (34) |
Accrued expenses and other liabilities | 22 | (375) |
Recall-related payments | (163) | (12) |
Income taxes | (98) | (39) |
Other, net | (76) | 130 |
Net cash provided by operating activities | 1,330 | 1,211 |
Investing activities | ||
Acquisitions, net of cash acquired | (104) | (26) |
Purchases of marketable securities | (31) | (23) |
Proceeds from sales of marketable securities | 28 | 31 |
Purchases of property, plant and equipment | (189) | (253) |
Other investing, net | (2) | (9) |
Net cash used in investing activities | (298) | (280) |
Financing activities | ||
Proceeds (payments) on short-term borrowings, net | (7) | 8 |
Proceeds from issuance of long-term debt | 5 | 2,293 |
Payments on long-term debt | (1,151) | (500) |
Dividends paid | (475) | (431) |
Repurchases of common stock | 0 | 0 |
Cash paid for taxes from withheld shares | (74) | (68) |
Other financing, net | (27) | (14) |
Net cash provided by (used in) financing activities | (1,729) | 1,288 |
Effect of exchange rate changes on cash and cash equivalents | (5) | (17) |
Change in cash and cash equivalents | (702) | 2,202 |
Cash and cash equivalents at beginning of period | 2,943 | 4,337 |
Cash and cash equivalents at end of period | $ 2,241 | $ 6,539 |
Basis Of Presentation
Basis Of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION General Information Management believes the accompanying unaudited Consolidated Financial Statements contain all adjustments, including normal recurring items, considered necessary to fairly present the financial position of Stryker Corporation and its consolidated subsidiaries ("Stryker," the "Company," "we," us" or "our") on June 30, 2021 and the results of operations for the three and six months 2021. The results of operations included in these Consolidated Financial Statements may not necessarily be indicative of our annual results. These statements should be read in conjunction with our Annual Report on Form 10-K for 2020. New Accounting Pronouncements Not Yet Adopted We evaluate all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our Consolidated Financial Statements. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2021 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Our policies for recognizing sales have not changed from those described in our Annual Report on Form 10-K for 2020. We disaggregate our net sales by product line and geographic location for each of our segments as we believe it best depicts how the nature, amount, timing and certainty of our net sales and cash flows are affected by economic factors. Net Sales by Product Line Three Months Six Months 2021 2020 2021 2020 Orthopaedics: Knees $ 474 $ 241 $ 886 $ 673 Hips 353 216 662 532 Trauma and Extremities 674 330 1,314 722 Other 127 107 250 189 $ 1,628 $ 894 $ 3,112 $ 2,116 MedSurg: Instruments $ 517 $ 328 $ 986 $ 841 Endoscopy 518 316 987 771 Medical 640 632 1,262 1,219 Sustainability 73 48 134 115 $ 1,748 $ 1,324 $ 3,369 $ 2,946 Neurotechnology and Spine: Neurotechnology $ 611 $ 369 $ 1,181 $ 852 Spine 307 177 585 438 $ 918 $ 546 $ 1,766 $ 1,290 Total $ 4,294 $ 2,764 $ 8,247 $ 6,352 Net Sales by Geography Three Months 2021 Three Months 2020 United States International United States International Orthopaedics: Knees $ 349 $ 125 $ 179 $ 62 Hips 221 132 140 76 Trauma and Extremities 475 199 208 122 Other 99 28 96 11 $ 1,144 $ 484 $ 623 $ 271 MedSurg: Instruments $ 401 $ 116 $ 249 $ 79 Endoscopy 407 111 253 63 Medical 488 152 454 178 Sustainability 72 1 48 — $ 1,368 $ 380 $ 1,004 $ 320 Neurotechnology and Spine: Neurotechnology $ 371 $ 240 $ 211 $ 158 Spine 217 90 128 49 $ 588 $ 330 $ 339 $ 207 Total $ 3,100 $ 1,194 $ 1,966 $ 798 Net Sales by Geography Six Months 2021 Six Months 2020 United States International United States International Orthopaedics: Knees $ 643 $ 243 $ 501 $ 172 Hips 407 255 341 191 Trauma and Extremities 915 399 468 254 Other 193 57 165 24 $ 2,158 $ 954 $ 1,475 $ 641 MedSurg: Instruments $ 756 $ 230 $ 659 $ 182 Endoscopy 761 226 617 154 Medical 961 301 908 311 Sustainability 132 2 114 1 $ 2,610 $ 759 $ 2,298 $ 648 Neurotechnology and Spine: Neurotechnology $ 706 $ 475 $ 512 $ 340 Spine 410 175 324 114 $ 1,116 $ 650 $ 836 $ 454 Total $ 5,884 $ 2,363 $ 4,609 $ 1,743 Contract Assets and Liabilities On June 30, 2021 and December 31, 2020 contract assets recorded in our Consolidated Balance Sheets were not significant. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income (AOCI) | 6 Months Ended |
Jun. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive (Loss) Income (AOCI) | ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (AOCI) Three Months 2021 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (252) $ 18 $ (630) $ (867) OCI — (9) 7 (75) (77) Income taxes — 2 (3) 2 1 Reclassifications to: Cost of sales — — 4 — 4 Other (income) expense — 4 (1) (9) (6) Income taxes — (1) 1 2 2 Net OCI $ — $ (4) $ 8 $ (80) $ (76) Ending $ (3) $ (256) $ 26 $ (710) $ (943) Three Months 2020 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (183) $ 21 $ (458) $ (623) OCI (1) (8) (33) (91) (133) Income taxes — 2 8 39 49 Reclassifications to: Cost of sales — — (3) — (3) Other (income) expense 1 3 (2) (7) (5) Income taxes — (1) — 1 — Net OCI $ — $ (4) $ (30) $ (58) $ (92) Ending $ (3) $ (187) $ (9) $ (516) $ (715) Six Months 2021 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (259) $ (10) $ (885) $ (1,157) OCI — (1) 34 198 231 Income taxes — (2) (11) (10) (23) Reclassifications to: Cost of sales — — 5 — 5 Other (income) expense — 8 9 (17) — Income taxes — (2) (1) 4 1 Net OCI $ — $ 3 $ 36 $ 175 $ 214 Ending $ (3) $ (256) $ 26 $ (710) $ (943) Six Months 2020 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (179) $ 47 $ (471) $ (606) OCI — (14) (72) (36) (122) Income taxes — 2 19 2 23 Reclassifications to: Cost of sales — — — — — Other (income) expense — 6 (3) (14) (11) Income taxes — (2) — 3 1 Net OCI $ — $ (8) $ (56) $ (45) $ (109) Ending $ (3) $ (187) $ (9) $ (516) $ (715) |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTSWe use operational and economic hedges, foreign currency exchange forward contracts, net investment hedges (both derivative and non-derivative financial instruments) and interest rate derivative instruments to manage the impact of currency exchange and interest rate fluctuations on earnings, cash flow and equity. We do not enter into derivative instruments for speculative purposes. We are exposed to potential credit loss in the event of nonperformance by our counterparties on our outstanding derivative instruments but do not anticipate nonperformance by any of our counterparties. Should a counterparty default, our maximum loss exposure is the asset balance of the instrument. We have not changed our hedging strategies, accounting practices or objectives from those disclosed in our Annual Report on Form 10-K for 2020. Foreign Currency Hedges June 2021 Cash Flow Net Investment Non-Designated Total Gross notional amount $ 950 $ 1,792 $ 5,339 $ 8,081 Maximum term in days 1612 Fair value: Other current assets $ 11 $ — $ 43 $ 54 Other noncurrent assets 1 22 — 23 Other current liabilities (16) — (14) (30) Other noncurrent liabilities (1) (7) — (8) Total fair value $ (5) $ 15 $ 29 $ 39 December 2020 Cash Flow Net Investment Non-Designated Total Gross notional amount $ 949 $ 1,828 $ 5,382 $ 8,159 Maximum term in days 1793 Fair value: Other current assets $ 9 $ — $ 7 $ 16 Other noncurrent assets — 4 — 4 Other current liabilities (12) — (121) (133) Other noncurrent liabilities (1) (26) — (27) Total fair value $ (4) $ (22) $ (114) $ (140) We have €1,500 in certain forward currency contracts designated as net investment hedges to hedge a portion of our investments in certain of our entities with functional currencies denominated in Euros. In addition to these derivative financial instruments designated as net investment hedges, we have designated €4,350 of senior unsecured notes as net investment hedges to selectively hedge portions of our investment in certain international subsidiaries. The currency effects of our Euro-denominated senior unsecured notes are reflected in AOCI within shareholders' equity where they offset gains and losses recorded on our net investment in international subsidiaries. On June 30, 2021 the total after tax gain (loss) in AOCI related to designated net investment hedges was ($291). Net Currency Exchange Rate Gains (Losses) Three Months Six Months Derivative instrument: Recorded in: 2021 2020 2021 2020 Cash Flow Cost of sales $ (4) $ 3 $ (5) $ — Net Investment Other income (expense), net 9 7 17 14 Non-Designated Other income (expense), net 1 (2) (1) (9) Total $ 6 $ 8 $ 11 $ 5 Pretax gains (losses) on derivatives designated as cash flow hedges of ($9) and net investment hedges of $33 recorded in AOCI are expected to be reclassified to cost of sales and other income (expense) in earnings within 12 months as of June 30, 2021. This cash flow hedge reclassification is primarily due to the sale of inventory that includes previously hedged purchases. A component of the AOCI amounts related to net investment hedges is reclassified over the life of the hedge instruments as we elected to exclude the initial value of the component related to the spot-forward difference from the effectiveness assessment. Interest Rate Hedges In the six months 2021 a loss of $11 was reclassified from AOCI to earnings relating to the termination of forward starting interest rate swaps with notional amounts of $750 designated as cash flow hedges as we now consider it probable that the original |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Our policies for managing risk related to foreign currency, interest rates, credit and markets and our process for determining fair value have not changed from those described in our Annual Report on Form 10-K for 2020. There were no significant transfers into or out of any level in 2021. Assets Measured at Fair Value June December 2021 2020 Cash and cash equivalents $ 2,241 $ 2,943 Trading marketable securities 183 171 Level 1 - Assets $ 2,424 $ 3,114 Available-for-sale marketable securities: Corporate and asset-backed debt securities $ 43 $ 38 United States agency debt securities 5 5 United States Treasury debt securities 32 36 Foreign government 1 — Certificates of deposit 3 2 Total available-for-sale marketable securities $ 84 $ 81 Foreign currency exchange forward contracts 77 20 Level 2 - Assets $ 161 $ 101 Total assets measured at fair value $ 2,585 $ 3,215 Liabilities Measured at Fair Value June December 2021 2020 Deferred compensation arrangements $ 183 $ 171 Level 1 - Liabilities $ 183 $ 171 Foreign currency exchange forward contracts $ 38 $ 160 Interest rate swap liability — 53 Level 2 - Liabilities $ 38 $ 213 Contingent consideration: Beginning $ 393 $ 306 Additions 4 108 Change in estimate 18 9 Settlements (21) (30) Ending $ 394 $ 393 Level 3 - Liabilities $ 394 $ 393 Total liabilities measured at fair value $ 615 $ 777 Fair Value of Available for Sale Securities by Maturity June 2021 December 2020 Due in one year or less $ 44 $ 42 Due after one year through three years $ 40 $ 39 On June 30, 2021 and December 31, 2020 the aggregate difference between the cost and fair value of available-for-sale marketable securities was nominal. Interest and marketable securities income was $18 and $25 in the three months and $35 and $65 in the six months 2021 and 2020, which was recorded in other income (expense), net. |
Contingencies and Commitments
Contingencies and Commitments | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | CONTINGENCIES AND COMMITMENTSWe are involved in various ongoing proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor, intellectual property and other matters, the most significant of which are more fully described below. The outcomes of these matters will generally not be known for prolonged periods of time. In certain of the legal proceedings, the claimants seek damages as well as other compensatory and equitable relief that could result in the payment of significant claims and settlements and/or the imposition of injunctions or other equitable relief. For legal matters for which management had sufficient information to reasonably estimate our future obligations, a liability representing management's best estimate of the probable loss, or the minimum of the range of probable losses when a best estimate within the range is not known, is recorded. The estimates are based on consultation with legal counsel, previous settlement experience and settlement strategies. If actual outcomes are less favorable than those estimated by management, additional expense may be incurred, which could unfavorably affect future operating results. We are self-insured for certain claims and expenses. The ultimate cost to us with respect to product liability claims could be materially different than the amount of the current estimates and accruals and could have a material adverse effect on our financial position, results of operations and cash flows. Recall Matters 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. In November 2014 we entered into a settlement agreement to compensate eligible United States patients who had revision surgery prior to November 3, 2014 and in December 2016 the settlement program was extended to patients who had revision surgery prior to December 19, 2016. In September 2020 we entered into a second settlement agreement to compensate eligible United States patients who had revision surgery prior to September 9, 2020. 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, there are remaining lawsuits that we will continue to defend against. In August 2016 and May 2018 we voluntarily recalled certain lot-specific sizes and offsets of LFIT Anatomic CoCr V40 Femoral Heads. Product liability lawsuits and claims relating to this voluntary recall have been filed against us. In November 2018 we entered into a settlement agreement to resolve a significant number of claims and lawsuits related to the recalls. The specific terms of the settlement agreement, including the financial terms, are confidential. With the acquisition of Wright as more fully described in Note 7, we are responsible for certain product liability claims, primarily related to certain hip products sold by Wright prior to its 2014 divestiture of the OrthoRecon business. We will continue to evaluate each claim and the possible loss we may incur. We have incurred, and expect to incur in the future, costs associated with the defense and settlement of these matters. For the six months 2021 we have recorded charges of $82 and made payments of $163, primarily related to Rejuvenate and ABG II Modular-Neck hip stems. Based on the information that has been received, we have estimated the remaining range of probable loss related to recall matters globally to be approximately $415 to $550. We have recorded reserves representing the remaining minimum of the range of probable loss. The final outcomes of these matters are dependent on many factors that are difficult to predict. Accordingly, the ultimate cost related to these matters may be materially different than the amount of our current estimate and accruals and could have a material adverse effect on our results of operations and cash flows. Leases June December 2021 2020 Right-of-use assets $ 404 $ 423 Lease liabilities, current $ 109 $ 109 Lease liabilities, non-current $ 306 $ 325 Other information: Weighted-average remaining lease term 5.8 years 5.6 years Weighted-average discount rate 2.74 % 2.57 % Three Months Six Months 2021 2020 2021 2020 Operating lease cost $ 31 $ 31 $ 67 $ 67 |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS We acquire stock in companies and various assets that continue to support our capital deployment and product development strategies. The aggregate purchase price of our acquisitions, net of cash acquired was $108 and $26 in the six months 2021 and 2020. In November 2020 we completed the acquisition of Wright Medical Group N.V. (Wright) for $30.75 per share, or an aggregate purchase price of $4.1 billion ($5.6 billion including convertible notes). Wright is a global medical device company focused on extremities and biologics. Wright is part of our Trauma and Extremities business within Orthopaedics. Goodwill attributable to the acquisition is not deductible for tax purposes . In December 2020 we completed the acquisition of OrthoSensor, Inc. (OrthoSensor). OrthoSensor is a leader in the digital evolution of musculoskeletal care and sensor technology for total joint replacement. OrthoSensor is part of our Joint Replacement business within Orthopaedics. Goodwill attributable to the acquisition is not deductible for tax purposes . Purchase price allocations for our significant acquisitions are: Purchase Price Allocation of Acquired Net Assets 2020 Wright Tangible assets and liabilities: Accounts receivable $ 127 Inventory 419 Deferred income tax assets 477 Other assets 345 Debt (1,446) Deferred income tax liabilities (490) Product liabilities (211) Other liabilities (291) Intangible assets: Customer and distributor relationships 182 Developed technology and patents 1,510 Trade name 58 Goodwill 3,401 Purchase price, net of cash acquired $ 4,081 Weighted-average life of intangible assets 12 Purchase price allocations for Wright and other 2020 acquisitions were based on preliminary valuations, primarily related to intangible assets, product liabilities and deferred income taxes. Our estimates and assumptions are subject to change within the measurement period. Consolidated Estimated Amortization Expense Remainder of 2021 2022 2023 2024 2025 $ 300 $ 588 $ 567 $ 540 $ 521 |
Debt and Credit Facilities
Debt and Credit Facilities | 6 Months Ended |
Jun. 30, 2021 | |
Long-term Debt, Unclassified [Abstract] | |
Debt And Credit Facilities | DEBT AND CREDIT FACILITIESWe 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 June 30, 2021. Our commercial paper program backed by our primary revolving credit facility which expires in August 2023 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 June 30, 2021 there were no borrowings outstanding under our credit facility or commercial paper programs. Summary of Total Debt June 2021 December 2020 Rate Due Senior unsecured notes: 2.625% March 15, 2021 $ — $ 750 1.125% November 30, 2023 655 668 0.600% December 1, 2023 597 597 3.375% May 15, 2024 592 590 0.250% December 3, 2024 1,010 1,030 1.150% June 15, 2025 645 644 3.375% November 1, 2025 747 747 3.500% March 15, 2026 993 992 2.125% November 30, 2027 891 909 3.650% March 7, 2028 596 596 0.750% March 1, 2029 950 969 1.950% June 15, 2030 989 989 2.625% November 30, 2030 767 782 1.000% December 3, 2031 885 903 4.100% April 1, 2043 392 392 4.375% May 15, 2044 395 395 4.625% March 15, 2046 982 981 2.900% June 15, 2050 642 641 Variable term loan November 10, 2023 — 400 Other 12 16 Total debt $ 12,740 $ 13,991 Less current maturities of debt 6 761 Total long-term debt $ 12,734 $ 13,230 June 2021 December 2020 Unamortized debt issuance costs $ 66 $ 71 Borrowing capacity on existing facilities $ 1,408 $ 2,903 Fair value of senior unsecured notes $ 13,881 $ 15,022 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. In March 2021 we repaid $750 of senior unsecured notes with a coupon of 2.625% that were due on March 15, 2021. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax [Abstract] | |
Income Taxes | INCOME TAXES Our effective tax rates were 10.6% and 4.6% in the three months and 13.1% and 18.5% in the six months 2021 and 2020. The change in the effective income tax rate for the three months was primarily due to pre-tax losses and a change in geographic profit mix recorded in 2020 and certain discrete tax items recorded in 2021. The effective income tax rates for the six months 2021 and 2020 reflect the continued lower effective income tax rates as a result of our European operations. In March 2021 the American Rescue Plan Act (the Act) was signed into law in the United States. We do not expect the provisions of the Act to have a material impact on our annual effective tax rate or Consolidated Financial Statements in 2021. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Three Months Six Months 2021 2020 2021 2020 Orthopaedics $ 1,628 $ 894 $ 3,112 $ 2,116 MedSurg 1,748 1,324 3,369 2,946 Neurotechnology and Spine 918 546 1,766 1,290 Net sales $ 4,294 $ 2,764 $ 8,247 $ 6,352 Orthopaedics $ 511 $ 163 $ 927 $ 555 MedSurg 441 237 986 634 Neurotechnology and Spine 313 75 442 285 Segment operating income $ 1,265 $ 475 $ 2,355 $ 1,474 Items not allocated to segments: Corporate and other (154) (130) (316) (267) Acquisition and integration-related charges (120) (19) (369) (56) Amortization of intangible assets (149) (110) (330) (228) Restructuring-related and other charges (17) (209) (31) (263) Medical device regulations (26) (22) (45) (46) Recall-related matters (76) — (82) 6 Regulatory and legal matters 9 (5) 9 (5) Consolidated operating income (loss) $ 732 $ (20) $ 1,191 $ 615 There were no significant changes to total assets by segment from information provided in our Annual Report on Form 10-K for 2020. |
Asset Impairments
Asset Impairments | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Asset Impairments | ASSET IMPAIRMENTSImpairment charges in the six months 2021 were not significant. In the second quarter of 2020, due to the significant negative impact the COVID-19 pandemic had on our operations and financial results, we suspended certain in-process investments resulting in charges of $189 to impair certain long-lived assets (primarily the portion of our investment in a new global ERP system that was in-process of being developed for future deployment) and product line and other exit costs. These charges were included in cost of sales and selling, general and administrative expenses. |
Risks and Uncertainties
Risks and Uncertainties | 6 Months Ended |
Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | RISK AND UNCERTAINTIESThe government in China has launched regional and national programs for volume-based procurement ("VBP") of high-value medical consumables to reduce healthcare costs. Each VBP tender has specific requirements to award contracts to the lowest bidders who are able to satisfy the quality and quantity requirements. The successful bidders may experience increases in unit sales volume for certain products, while unsuccessful bidders will lose unit sales volume. While the unit volume increases for successful bidders may enable manufacturers to lower their distribution and commercial costs, we expect that the new prices required for a successful bid will, nevertheless, negatively impact our existing commercial operations of joint replacement and trauma products in China. Based on preliminary indications received subsequent to the end of the second quarter, we believe we will be a successful bidder in certain regional tenders for several of our trauma products and unsuccessful in the bid for other trauma products. When the final decisions are made, it is reasonably possible that we will record an impairment charge of approximately $100 relating to certain long-lived and intangible assets. The national VBP program for hips and knees is currently in preparation. If we are unsuccessful in that national program, we expect that our commercial operations of joint replacement products will also be negatively impacted; however, we do not expect additional intangible asset impairments. Spine products are part of the volume-based procurement in one province and it is not clear to what extent spine products will be included in further VBP initiatives provincial or nationwide. Our business in China represented approximately 2% of our revenues for the year ended December 31, 2020. |
Basis Of Presentation (Policies
Basis Of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements Not Yet Adopted | New Accounting Pronouncements Not Yet Adopted We evaluate all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our Consolidated Financial Statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue Recognition [Abstract] | |
Schedule of Disaggregated Revenue | We disaggregate our net sales by product line and geographic location for each of our segments as we believe it best depicts how the nature, amount, timing and certainty of our net sales and cash flows are affected by economic factors. Net Sales by Product Line Three Months Six Months 2021 2020 2021 2020 Orthopaedics: Knees $ 474 $ 241 $ 886 $ 673 Hips 353 216 662 532 Trauma and Extremities 674 330 1,314 722 Other 127 107 250 189 $ 1,628 $ 894 $ 3,112 $ 2,116 MedSurg: Instruments $ 517 $ 328 $ 986 $ 841 Endoscopy 518 316 987 771 Medical 640 632 1,262 1,219 Sustainability 73 48 134 115 $ 1,748 $ 1,324 $ 3,369 $ 2,946 Neurotechnology and Spine: Neurotechnology $ 611 $ 369 $ 1,181 $ 852 Spine 307 177 585 438 $ 918 $ 546 $ 1,766 $ 1,290 Total $ 4,294 $ 2,764 $ 8,247 $ 6,352 Net Sales by Geography Three Months 2021 Three Months 2020 United States International United States International Orthopaedics: Knees $ 349 $ 125 $ 179 $ 62 Hips 221 132 140 76 Trauma and Extremities 475 199 208 122 Other 99 28 96 11 $ 1,144 $ 484 $ 623 $ 271 MedSurg: Instruments $ 401 $ 116 $ 249 $ 79 Endoscopy 407 111 253 63 Medical 488 152 454 178 Sustainability 72 1 48 — $ 1,368 $ 380 $ 1,004 $ 320 Neurotechnology and Spine: Neurotechnology $ 371 $ 240 $ 211 $ 158 Spine 217 90 128 49 $ 588 $ 330 $ 339 $ 207 Total $ 3,100 $ 1,194 $ 1,966 $ 798 Net Sales by Geography Six Months 2021 Six Months 2020 United States International United States International Orthopaedics: Knees $ 643 $ 243 $ 501 $ 172 Hips 407 255 341 191 Trauma and Extremities 915 399 468 254 Other 193 57 165 24 $ 2,158 $ 954 $ 1,475 $ 641 MedSurg: Instruments $ 756 $ 230 $ 659 $ 182 Endoscopy 761 226 617 154 Medical 961 301 908 311 Sustainability 132 2 114 1 $ 2,610 $ 759 $ 2,298 $ 648 Neurotechnology and Spine: Neurotechnology $ 706 $ 475 $ 512 $ 340 Spine 410 175 324 114 $ 1,116 $ 650 $ 836 $ 454 Total $ 5,884 $ 2,363 $ 4,609 $ 1,743 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (AOCI) (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Three Months 2021 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (252) $ 18 $ (630) $ (867) OCI — (9) 7 (75) (77) Income taxes — 2 (3) 2 1 Reclassifications to: Cost of sales — — 4 — 4 Other (income) expense — 4 (1) (9) (6) Income taxes — (1) 1 2 2 Net OCI $ — $ (4) $ 8 $ (80) $ (76) Ending $ (3) $ (256) $ 26 $ (710) $ (943) Three Months 2020 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (183) $ 21 $ (458) $ (623) OCI (1) (8) (33) (91) (133) Income taxes — 2 8 39 49 Reclassifications to: Cost of sales — — (3) — (3) Other (income) expense 1 3 (2) (7) (5) Income taxes — (1) — 1 — Net OCI $ — $ (4) $ (30) $ (58) $ (92) Ending $ (3) $ (187) $ (9) $ (516) $ (715) Six Months 2021 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (259) $ (10) $ (885) $ (1,157) OCI — (1) 34 198 231 Income taxes — (2) (11) (10) (23) Reclassifications to: Cost of sales — — 5 — 5 Other (income) expense — 8 9 (17) — Income taxes — (2) (1) 4 1 Net OCI $ — $ 3 $ 36 $ 175 $ 214 Ending $ (3) $ (256) $ 26 $ (710) $ (943) Six Months 2020 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (179) $ 47 $ (471) $ (606) OCI — (14) (72) (36) (122) Income taxes — 2 19 2 23 Reclassifications to: Cost of sales — — — — — Other (income) expense — 6 (3) (14) (11) Income taxes — (2) — 3 1 Net OCI $ — $ (8) $ (56) $ (45) $ (109) Ending $ (3) $ (187) $ (9) $ (516) $ (715) |
Reclassification out of Accumulated Other Comprehensive Income | Three Months 2021 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (252) $ 18 $ (630) $ (867) OCI — (9) 7 (75) (77) Income taxes — 2 (3) 2 1 Reclassifications to: Cost of sales — — 4 — 4 Other (income) expense — 4 (1) (9) (6) Income taxes — (1) 1 2 2 Net OCI $ — $ (4) $ 8 $ (80) $ (76) Ending $ (3) $ (256) $ 26 $ (710) $ (943) Three Months 2020 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (183) $ 21 $ (458) $ (623) OCI (1) (8) (33) (91) (133) Income taxes — 2 8 39 49 Reclassifications to: Cost of sales — — (3) — (3) Other (income) expense 1 3 (2) (7) (5) Income taxes — (1) — 1 — Net OCI $ — $ (4) $ (30) $ (58) $ (92) Ending $ (3) $ (187) $ (9) $ (516) $ (715) Six Months 2021 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (259) $ (10) $ (885) $ (1,157) OCI — (1) 34 198 231 Income taxes — (2) (11) (10) (23) Reclassifications to: Cost of sales — — 5 — 5 Other (income) expense — 8 9 (17) — Income taxes — (2) (1) 4 1 Net OCI $ — $ 3 $ 36 $ 175 $ 214 Ending $ (3) $ (256) $ 26 $ (710) $ (943) Six Months 2020 Marketable Securities Pension Plans Hedges Financial Statement Translation Total Beginning $ (3) $ (179) $ 47 $ (471) $ (606) OCI — (14) (72) (36) (122) Income taxes — 2 19 2 23 Reclassifications to: Cost of sales — — — — — Other (income) expense — 6 (3) (14) (11) Income taxes — (2) — 3 1 Net OCI $ — $ (8) $ (56) $ (45) $ (109) Ending $ (3) $ (187) $ (9) $ (516) $ (715) |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | June 2021 Cash Flow Net Investment Non-Designated Total Gross notional amount $ 950 $ 1,792 $ 5,339 $ 8,081 Maximum term in days 1612 Fair value: Other current assets $ 11 $ — $ 43 $ 54 Other noncurrent assets 1 22 — 23 Other current liabilities (16) — (14) (30) Other noncurrent liabilities (1) (7) — (8) Total fair value $ (5) $ 15 $ 29 $ 39 December 2020 Cash Flow Net Investment Non-Designated Total Gross notional amount $ 949 $ 1,828 $ 5,382 $ 8,159 Maximum term in days 1793 Fair value: Other current assets $ 9 $ — $ 7 $ 16 Other noncurrent assets — 4 — 4 Other current liabilities (12) — (121) (133) Other noncurrent liabilities (1) (26) — (27) Total fair value $ (4) $ (22) $ (114) $ (140) |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | Three Months Six Months Derivative instrument: Recorded in: 2021 2020 2021 2020 Cash Flow Cost of sales $ (4) $ 3 $ (5) $ — Net Investment Other income (expense), net 9 7 17 14 Non-Designated Other income (expense), net 1 (2) (1) (9) Total $ 6 $ 8 $ 11 $ 5 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Assets Measured at Fair Value June December 2021 2020 Cash and cash equivalents $ 2,241 $ 2,943 Trading marketable securities 183 171 Level 1 - Assets $ 2,424 $ 3,114 Available-for-sale marketable securities: Corporate and asset-backed debt securities $ 43 $ 38 United States agency debt securities 5 5 United States Treasury debt securities 32 36 Foreign government 1 — Certificates of deposit 3 2 Total available-for-sale marketable securities $ 84 $ 81 Foreign currency exchange forward contracts 77 20 Level 2 - Assets $ 161 $ 101 Total assets measured at fair value $ 2,585 $ 3,215 Liabilities Measured at Fair Value June December 2021 2020 Deferred compensation arrangements $ 183 $ 171 Level 1 - Liabilities $ 183 $ 171 Foreign currency exchange forward contracts $ 38 $ 160 Interest rate swap liability — 53 Level 2 - Liabilities $ 38 $ 213 Contingent consideration: Beginning $ 393 $ 306 Additions 4 108 Change in estimate 18 9 Settlements (21) (30) Ending $ 394 $ 393 Level 3 - Liabilities $ 394 $ 393 Total liabilities measured at fair value $ 615 $ 777 |
Investments Classified by Contractual Maturity Date | Fair Value of Available for Sale Securities by Maturity June 2021 December 2020 Due in one year or less $ 44 $ 42 Due after one year through three years $ 40 $ 39 |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease, Cost | Leases June December 2021 2020 Right-of-use assets $ 404 $ 423 Lease liabilities, current $ 109 $ 109 Lease liabilities, non-current $ 306 $ 325 Other information: Weighted-average remaining lease term 5.8 years 5.6 years Weighted-average discount rate 2.74 % 2.57 % Three Months Six Months 2021 2020 2021 2020 Operating lease cost $ 31 $ 31 $ 67 $ 67 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | Purchase price allocations for our significant acquisitions are: Purchase Price Allocation of Acquired Net Assets 2020 Wright Tangible assets and liabilities: Accounts receivable $ 127 Inventory 419 Deferred income tax assets 477 Other assets 345 Debt (1,446) Deferred income tax liabilities (490) Product liabilities (211) Other liabilities (291) Intangible assets: Customer and distributor relationships 182 Developed technology and patents 1,510 Trade name 58 Goodwill 3,401 Purchase price, net of cash acquired $ 4,081 Weighted-average life of intangible assets 12 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Consolidated Estimated Amortization Expense Remainder of 2021 2022 2023 2024 2025 $ 300 $ 588 $ 567 $ 540 $ 521 |
Debt and Credit Facilities (Tab
Debt and Credit Facilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt Instruments | Summary of Total Debt June 2021 December 2020 Rate Due Senior unsecured notes: 2.625% March 15, 2021 $ — $ 750 1.125% November 30, 2023 655 668 0.600% December 1, 2023 597 597 3.375% May 15, 2024 592 590 0.250% December 3, 2024 1,010 1,030 1.150% June 15, 2025 645 644 3.375% November 1, 2025 747 747 3.500% March 15, 2026 993 992 2.125% November 30, 2027 891 909 3.650% March 7, 2028 596 596 0.750% March 1, 2029 950 969 1.950% June 15, 2030 989 989 2.625% November 30, 2030 767 782 1.000% December 3, 2031 885 903 4.100% April 1, 2043 392 392 4.375% May 15, 2044 395 395 4.625% March 15, 2046 982 981 2.900% June 15, 2050 642 641 Variable term loan November 10, 2023 — 400 Other 12 16 Total debt $ 12,740 $ 13,991 Less current maturities of debt 6 761 Total long-term debt $ 12,734 $ 13,230 June 2021 December 2020 Unamortized debt issuance costs $ 66 $ 71 Borrowing capacity on existing facilities $ 1,408 $ 2,903 Fair value of senior unsecured notes $ 13,881 $ 15,022 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Sales and Other Financial Information by Business Segment | Three Months Six Months 2021 2020 2021 2020 Orthopaedics $ 1,628 $ 894 $ 3,112 $ 2,116 MedSurg 1,748 1,324 3,369 2,946 Neurotechnology and Spine 918 546 1,766 1,290 Net sales $ 4,294 $ 2,764 $ 8,247 $ 6,352 Orthopaedics $ 511 $ 163 $ 927 $ 555 MedSurg 441 237 986 634 Neurotechnology and Spine 313 75 442 285 Segment operating income $ 1,265 $ 475 $ 2,355 $ 1,474 Items not allocated to segments: Corporate and other (154) (130) (316) (267) Acquisition and integration-related charges (120) (19) (369) (56) Amortization of intangible assets (149) (110) (330) (228) Restructuring-related and other charges (17) (209) (31) (263) Medical device regulations (26) (22) (45) (46) Recall-related matters (76) — (82) 6 Regulatory and legal matters 9 (5) 9 (5) Consolidated operating income (loss) $ 732 $ (20) $ 1,191 $ 615 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Sales Analysis (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 4,294 | $ 2,764 | $ 8,247 | $ 6,352 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,100 | 1,966 | 5,884 | 4,609 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,194 | 798 | 2,363 | 1,743 |
Orthopaedics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,628 | 894 | 3,112 | 2,116 |
Orthopaedics | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,144 | 623 | 2,158 | 1,475 |
Orthopaedics | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 484 | 271 | 954 | 641 |
Orthopaedics | Knees | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 474 | 241 | 886 | 673 |
Orthopaedics | Knees | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 349 | 179 | 643 | 501 |
Orthopaedics | Knees | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 125 | 62 | 243 | 172 |
Orthopaedics | Hips | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 353 | 216 | 662 | 532 |
Orthopaedics | Hips | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 221 | 140 | 407 | 341 |
Orthopaedics | Hips | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 132 | 76 | 255 | 191 |
Orthopaedics | Trauma and Extremities | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 674 | 330 | 1,314 | 722 |
Orthopaedics | Trauma and Extremities | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 475 | 208 | 915 | 468 |
Orthopaedics | Trauma and Extremities | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 199 | 122 | 399 | 254 |
Orthopaedics | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 127 | 107 | 250 | 189 |
Orthopaedics | Other | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 99 | 96 | 193 | 165 |
Orthopaedics | Other | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 28 | 11 | 57 | 24 |
MedSurg | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,748 | 1,324 | 3,369 | 2,946 |
MedSurg | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,368 | 1,004 | 2,610 | 2,298 |
MedSurg | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 380 | 320 | 759 | 648 |
MedSurg | Instruments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 517 | 328 | 986 | 841 |
MedSurg | Instruments | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 401 | 249 | 756 | 659 |
MedSurg | Instruments | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 116 | 79 | 230 | 182 |
MedSurg | Endoscopy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 518 | 316 | 987 | 771 |
MedSurg | Endoscopy | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 407 | 253 | 761 | 617 |
MedSurg | Endoscopy | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 111 | 63 | 226 | 154 |
MedSurg | Medical | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 640 | 632 | 1,262 | 1,219 |
MedSurg | Medical | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 488 | 454 | 961 | 908 |
MedSurg | Medical | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 152 | 178 | 301 | 311 |
MedSurg | Sustainability | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 73 | 48 | 134 | 115 |
MedSurg | Sustainability | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 72 | 48 | 132 | 114 |
MedSurg | Sustainability | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1 | 0 | 2 | 1 |
Neurotechnology and Spine | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 918 | 546 | 1,766 | 1,290 |
Neurotechnology and Spine | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 588 | 339 | 1,116 | 836 |
Neurotechnology and Spine | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 330 | 207 | 650 | 454 |
Neurotechnology and Spine | Neurotechnology | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 611 | 369 | 1,181 | 852 |
Neurotechnology and Spine | Neurotechnology | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 371 | 211 | 706 | 512 |
Neurotechnology and Spine | Neurotechnology | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 240 | 158 | 475 | 340 |
Neurotechnology and Spine | Spine | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 307 | 177 | 585 | 438 |
Neurotechnology and Spine | Spine | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 217 | 128 | 410 | 324 |
Neurotechnology and Spine | Spine | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 90 | $ 49 | $ 175 | $ 114 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Revenue Recognition [Abstract] | ||
Contract liabilities | $ 476 | $ 416 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income (AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax at beginning of period | $ (867) | $ (623) | $ (1,157) | $ (606) |
OCI | (77) | (133) | 231 | (122) |
Income taxes | 1 | 49 | (23) | 23 |
Cost of sales | 1,522 | 1,216 | 2,966 | 2,473 |
Other (income) expense | (70) | (67) | (162) | (112) |
Income taxes | (70) | 4 | (135) | (93) |
Net OCI | (76) | (92) | 214 | (109) |
Accumulated Other Comprehensive Income (Loss), Net of Tax at end of period | (943) | (715) | (943) | (715) |
Reclassification out of Accumulated Other Comprehensive Income | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Cost of sales | 4 | (3) | 5 | 0 |
Other (income) expense | (6) | (5) | 0 | (11) |
Income taxes | 2 | 0 | 1 | 1 |
Net OCI | (76) | (92) | 214 | (109) |
Marketable Securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax at beginning of period | (3) | (3) | (3) | (3) |
OCI | 0 | (1) | 0 | 0 |
Income taxes | 0 | 0 | 0 | 0 |
Accumulated Other Comprehensive Income (Loss), Net of Tax at end of period | (3) | (3) | (3) | (3) |
Marketable Securities | Reclassification out of Accumulated Other Comprehensive Income | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Cost of sales | 0 | 0 | 0 | 0 |
Other (income) expense | 0 | 1 | 0 | 0 |
Income taxes | 0 | 0 | 0 | 0 |
Net OCI | 0 | 0 | 0 | 0 |
Pension Plans | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax at beginning of period | (252) | (183) | (259) | (179) |
OCI | (9) | (8) | (1) | (14) |
Income taxes | 2 | 2 | (2) | 2 |
Accumulated Other Comprehensive Income (Loss), Net of Tax at end of period | (256) | (187) | (256) | (187) |
Pension Plans | Reclassification out of Accumulated Other Comprehensive Income | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Cost of sales | 0 | 0 | 0 | 0 |
Other (income) expense | 4 | 3 | 8 | 6 |
Income taxes | (1) | (1) | (2) | (2) |
Net OCI | (4) | (4) | 3 | (8) |
Hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax at beginning of period | 18 | 21 | (10) | 47 |
OCI | 7 | (33) | 34 | (72) |
Income taxes | (3) | 8 | (11) | 19 |
Accumulated Other Comprehensive Income (Loss), Net of Tax at end of period | 26 | (9) | 26 | (9) |
Hedges | Reclassification out of Accumulated Other Comprehensive Income | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Cost of sales | 4 | (3) | 5 | 0 |
Other (income) expense | (1) | (2) | 9 | (3) |
Income taxes | 1 | 0 | (1) | 0 |
Net OCI | 8 | (30) | 36 | (56) |
Financial Statement Translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax at beginning of period | (630) | (458) | (885) | (471) |
OCI | (75) | (91) | 198 | (36) |
Income taxes | 2 | 39 | (10) | 2 |
Accumulated Other Comprehensive Income (Loss), Net of Tax at end of period | (710) | (516) | (710) | (516) |
Financial Statement Translation | Reclassification out of Accumulated Other Comprehensive Income | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Cost of sales | 0 | 0 | 0 | 0 |
Other (income) expense | (9) | (7) | (17) | (14) |
Income taxes | 2 | 1 | 4 | 3 |
Net OCI | $ (80) | $ (58) | $ 175 | $ (45) |
Derivative Instruments (Forward
Derivative Instruments (Forward Currency Exchange Contracts) (Details) - Foreign Exchange Contract € in Millions, $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2021EUR (€) | |
Derivative [Line Items] | |||
Notional Amount | $ 8,081 | $ 8,159 | |
Maximum term in days | 1612 days | 1793 days | |
Derivative, Fair Value, Net | $ 39 | $ (140) | |
Other current assets | |||
Derivative [Line Items] | |||
Derivative assets | 54 | 16 | |
Other noncurrent assets | |||
Derivative [Line Items] | |||
Derivative assets | 23 | 4 | |
Other current liabilities | |||
Derivative [Line Items] | |||
Derivative liabilities | (30) | (133) | |
Other noncurrent liabilities | |||
Derivative [Line Items] | |||
Derivative liabilities | (8) | (27) | |
Net Investment | |||
Derivative [Line Items] | |||
Notional Amount | € | € 4,350 | ||
Non-Designated | |||
Derivative [Line Items] | |||
Notional Amount | 5,339 | 5,382 | |
Derivative, Fair Value, Net | 29 | (114) | |
Non-Designated | Other current assets | |||
Derivative [Line Items] | |||
Derivative assets | 43 | 7 | |
Non-Designated | Other noncurrent assets | |||
Derivative [Line Items] | |||
Derivative assets | 0 | 0 | |
Non-Designated | Other current liabilities | |||
Derivative [Line Items] | |||
Derivative liabilities | (14) | (121) | |
Non-Designated | Other noncurrent liabilities | |||
Derivative [Line Items] | |||
Derivative liabilities | 0 | 0 | |
Cash Flow | Net Investment | |||
Derivative [Line Items] | |||
Notional Amount | 950 | 949 | |
Derivative, Fair Value, Net | (5) | (4) | |
Cash Flow | Net Investment | Other current assets | |||
Derivative [Line Items] | |||
Derivative assets | 11 | 9 | |
Cash Flow | Net Investment | Other noncurrent assets | |||
Derivative [Line Items] | |||
Derivative assets | 1 | 0 | |
Cash Flow | Net Investment | Other current liabilities | |||
Derivative [Line Items] | |||
Derivative liabilities | (16) | (12) | |
Cash Flow | Net Investment | Other noncurrent liabilities | |||
Derivative [Line Items] | |||
Derivative liabilities | (1) | (1) | |
Net Investment | Net Investment | |||
Derivative [Line Items] | |||
Notional Amount | 1,792 | 1,828 | |
Derivative, Fair Value, Net | 15 | (22) | |
Net Investment | Net Investment | Other current assets | |||
Derivative [Line Items] | |||
Derivative assets | 0 | 0 | |
Net Investment | Net Investment | Other noncurrent assets | |||
Derivative [Line Items] | |||
Derivative assets | 22 | 4 | |
Net Investment | Net Investment | Other current liabilities | |||
Derivative [Line Items] | |||
Derivative liabilities | 0 | 0 | |
Net Investment | Net Investment | Other noncurrent liabilities | |||
Derivative [Line Items] | |||
Derivative liabilities | $ (7) | $ (26) |
Derivative Instruments (Narrati
Derivative Instruments (Narrative) (Details) | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2021EUR (€) | Dec. 31, 2020USD ($) | |
Foreign Exchange Contract | |||
Notional amount | $ 8,081,000,000 | $ 8,159,000,000 | |
Interest Rate Swap | |||
Reclassification of gain (loss) from AOCI to earnings | 11,000,000 | ||
Designated as Hedging Instrument | Foreign Exchange Contract | |||
Derivative, Notional Amount | € | € 1,500,000,000 | ||
Notional amount | € | € 4,350,000,000 | ||
Derivative, fair value | (291,000,000) | ||
Cash flow hedge gain (loss) to be reclassified within twelve months | (9,000,000) | ||
Other Income | 33,000,000 | ||
Designated as Hedging Instrument | Interest Rate Swap | |||
Cash flow hedge gain (loss) to be reclassified within twelve months | 5,000,000 | ||
Cash Flow | Designated as Hedging Instrument | |||
Derivative, Notional Amount | 750,000,000 | ||
Cash Flow | Designated as Hedging Instrument | Foreign Exchange Contract | |||
Notional amount | $ 950,000,000 | $ 949,000,000 |
Derivative Instruments (Income
Derivative Instruments (Income Statement Location) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Foreign Exchange Contract | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net currency exchange rate gains (losses) | $ 6 | $ 8 | $ 11 | $ 5 |
Foreign Exchange Contract | Cost of sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net currency exchange rate gains (losses) | (4) | 3 | (5) | 0 |
Foreign Exchange Contract | Other income (expense), net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net currency exchange rate gains (losses) | 1 | (2) | (1) | (9) |
Net Investment | Other income (expense), net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net currency exchange rate gains (losses) | $ 9 | $ 7 | $ 17 | $ 14 |
Fair Value Measurements (Valuat
Fair Value Measurements (Valuation Of Financial Instruments By Pricing Categories) (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 2,241 | $ 2,943 |
Assets | ||
Available-for-sale securities, current | 84 | 81 |
Investments Fair Value Disclosure | 2,585 | 3,215 |
Contingent consideration: | ||
Total liabilities measured at fair value | 615 | 777 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 2,241 | 2,943 |
Trading marketable securities | 183 | 171 |
Assets | ||
Investments Fair Value Disclosure | 2,424 | 3,114 |
Deferred compensation arrangements | 183 | 171 |
Contingent consideration: | ||
Total liabilities measured at fair value | 183 | 171 |
Fair Value, Inputs, Level 2 | ||
Assets | ||
Available-for-sale securities, current | 84 | 81 |
Investments Fair Value Disclosure | 161 | 101 |
Contingent consideration: | ||
Total liabilities measured at fair value | 38 | 213 |
Fair Value, Inputs, Level 2 | Foreign currency exchange forward contracts | ||
Assets | ||
Derivative asset | 77 | 20 |
Liabilities | ||
Foreign currency exchange forward contracts | 38 | 160 |
Fair Value, Inputs, Level 2 | Interest Rate Swap | ||
Liabilities | ||
Foreign currency exchange forward contracts | 0 | 53 |
Fair Value, Inputs, Level 2 | Corporate and asset-backed debt securities | ||
Assets | ||
Available-for-sale securities, current | 43 | 38 |
Fair Value, Inputs, Level 2 | United States agency debt securities | ||
Assets | ||
Available-for-sale securities, current | 5 | 5 |
Fair Value, Inputs, Level 2 | United States Treasury debt securities | ||
Assets | ||
Available-for-sale securities, current | 32 | 36 |
Fair Value, Inputs, Level 2 | Foreign government | ||
Assets | ||
Available-for-sale securities, current | 1 | 0 |
Fair Value, Inputs, Level 2 | Certificates of deposit | ||
Assets | ||
Available-for-sale securities, current | 3 | 2 |
Fair Value, Inputs, Level 3 | ||
Contingent consideration: | ||
Beginning | 393 | 306 |
Additions | 4 | 108 |
Change in estimate | 18 | 9 |
Settlements | (21) | (30) |
Ending | 394 | 393 |
Total liabilities measured at fair value | $ 394 | $ 393 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Measured At Fair Value On A Recurring Basis Using Unobservable Inputs (Level 3)) (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value Disclosures [Abstract] | ||
Due in one year or less | $ 44 | $ 42 |
Due after one year through three years | $ 40 | $ 39 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | ||||
Gain on sale of marketable securities | $ 18 | $ 25 | $ 35 | $ 65 |
Contingencies and Commitments_2
Contingencies and Commitments (Narrative) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Loss Contingencies [Line Items] | |
Charges during period | $ 82 |
Payments during period | 163 |
Minimum | |
Loss Contingencies [Line Items] | |
Estimate of possible loss | 415 |
Maximum | |
Loss Contingencies [Line Items] | |
Estimate of possible loss | $ 550 |
Contingencies and Commitments -
Contingencies and Commitments - Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Right-of-use assets | $ 404 | $ 404 | $ 423 | ||
Lease liabilities, current | 109 | 109 | 109 | ||
Lease liabilities, non-current | $ 306 | $ 306 | $ 325 | ||
Other information: | |||||
Weighted-average remaining lease term | 5 years 9 months 18 days | 5 years 9 months 18 days | 5 years 7 months 6 days | ||
Weighted-average discount rate | 2.74% | 2.74% | 2.57% | ||
Operating lease cost | $ 31 | $ 31 | $ 67 | $ 67 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | |
Nov. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Business Acquisition [Line Items] | |||
Aggregate purchase price of acquisitions | $ 108 | $ 26 | |
Business combination, consideration transferred, including convertible notes | $ 5,600 | ||
Wright | |||
Business Acquisition [Line Items] | |||
Aggregate purchase price of acquisitions | $ 4,100 | ||
Consideration transferred (in dollars per share) | $ 30.75 |
Acquisitions (Allocation Of The
Acquisitions (Allocation Of The Preliminary Purchase Price To The Acquired Net Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2021 | |
Goodwill | $ 12,778 | $ 12,802 |
Wright | ||
Accounts receivable | 127 | |
Inventory | 419 | |
Deferred income tax assets | 477 | |
Other assets | 345 | |
Debt | (1,446) | |
Deferred income tax liabilities | (490) | |
Product liabilities | (211) | |
Other liabilities | (291) | |
Goodwill | 3,401 | |
Purchase price, net of cash acquired | $ 4,081 | |
Weighted-average life of intangible assets | 12 years | |
Wright | Customer and distributor relationships | ||
Intangible assets acquired | $ 182 | |
Wright | Developed technology and patents | ||
Intangible assets acquired | 1,510 | |
Wright | Trade name | ||
Intangible assets acquired | $ 58 |
Acquisitions (Future Amortizati
Acquisitions (Future Amortization Expense) (Details) $ in Millions | Jun. 30, 2021USD ($) |
Business Combinations [Abstract] | |
Remainder of 2021 | $ 300 |
2022 | 588 |
2023 | 567 |
2024 | 540 |
2025 | $ 521 |
Debt and Credit Facilities (Det
Debt and Credit Facilities (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Amounts outstanding under commercial paper program | $ 0 | ||
Other Long-term Debt | 12,000,000 | $ 16,000,000 | |
Total debt | 12,740,000,000 | 13,991,000,000 | |
Less current maturities of debt | 6,000,000 | 761,000,000 | |
Total long-term debt | 12,734,000,000 | 13,230,000,000 | |
Unamortized debt issuance costs | 66,000,000 | 71,000,000 | |
Borrowing capacity on existing facilities | 1,408,000,000 | 2,903,000,000 | |
Fair value of senior unsecured notes | $ 13,881,000,000 | 15,022,000,000 | |
Commercial Paper | |||
Debt instrument, maturity | 397 days | ||
Commercial Paper | Maximum | |||
Commercial paper | $ 1,500,000,000 | ||
Senior Unsecured Notes 2.625% due 2021 | |||
Stated interest rate | 2.625% | 2.625% | |
Maturity Date | Mar. 15, 2021 | ||
Unsecured Debt | $ 0 | 750,000,000 | |
Debt instrument, repurchased face amount | $ 750,000,000 | ||
Senior Unsecured Notes 1.125% due 2021 | |||
Stated interest rate | 1.125% | ||
Maturity Date | Nov. 30, 2023 | ||
Unsecured Debt | $ 655,000,000 | 668,000,000 | |
Debt instrument, repurchased face amount | $ 400,000,000 | ||
Senior Unsecured Notes, 0.600% Due 2023 | |||
Stated interest rate | 0.60% | ||
Maturity Date | Dec. 1, 2023 | ||
Unsecured Debt | $ 597,000,000 | 597,000,000 | |
Senior Unsecured Notes 3.375% due 2024 | |||
Stated interest rate | 3.375% | ||
Maturity Date | May 15, 2024 | ||
Unsecured Debt | $ 592,000,000 | 590,000,000 | |
Senior Unsecured Notes, 0.250% Due 2024 | |||
Stated interest rate | 0.25% | ||
Maturity Date | Dec. 3, 2024 | ||
Unsecured Debt | $ 1,010,000,000 | 1,030,000,000 | |
Senior Unsecured Notes, 1.150% Due 2025 | |||
Stated interest rate | 1.15% | ||
Maturity Date | Jun. 15, 2025 | ||
Unsecured Debt | $ 645,000,000 | 644,000,000 | |
Senior Unsecured Notes 3.375% due 2025 | |||
Stated interest rate | 3.375% | ||
Maturity Date | Nov. 1, 2025 | ||
Unsecured Debt | $ 747,000,000 | 747,000,000 | |
Senior Unsecured Notes 3.50% due 2026 | |||
Stated interest rate | 3.50% | ||
Maturity Date | Mar. 15, 2026 | ||
Unsecured Debt | $ 993,000,000 | 992,000,000 | |
Senior Unsecured Notes 2.125% due 2027 | |||
Stated interest rate | 2.125% | ||
Maturity Date | Nov. 30, 2027 | ||
Unsecured Debt | $ 891,000,000 | 909,000,000 | |
Senior Unsecured Notes 3.650% due 2028 | |||
Stated interest rate | 3.65% | ||
Maturity Date | Mar. 7, 2028 | ||
Unsecured Debt | $ 596,000,000 | 596,000,000 | |
Senior Unsecured Notes, 0.750% Due 2029 | |||
Stated interest rate | 0.75% | ||
Maturity Date | Mar. 1, 2029 | ||
Unsecured Debt | $ 950,000,000 | 969,000,000 | |
Senior Unsecured Notes, 1.950% Due 2030 | |||
Stated interest rate | 1.95% | ||
Maturity Date | Jun. 15, 2030 | ||
Unsecured Debt | $ 989,000,000 | 989,000,000 | |
Senior Unsecured Notes 2.625% due 2030 | |||
Stated interest rate | 2.625% | ||
Maturity Date | Nov. 30, 2030 | ||
Unsecured Debt | $ 767,000,000 | 782,000,000 | |
Senior Unsecured Notes, 1.000% Due 2031 | |||
Stated interest rate | 1.00% | ||
Maturity Date | Dec. 3, 2031 | ||
Unsecured Debt | $ 885,000,000 | 903,000,000 | |
Senior Unsecured Notes 4.100% due 2043 | |||
Stated interest rate | 4.10% | ||
Maturity Date | Apr. 1, 2043 | ||
Unsecured Debt | $ 392,000,000 | 392,000,000 | |
Senior Unsecured Notes 4.375% due 2044 | |||
Stated interest rate | 4.375% | ||
Maturity Date | May 15, 2044 | ||
Unsecured Debt | $ 395,000,000 | 395,000,000 | |
Senior Unsecured Notes 4.625% due 2046 | |||
Stated interest rate | 4.625% | ||
Maturity Date | Mar. 15, 2046 | ||
Unsecured Debt | $ 982,000,000 | 981,000,000 | |
Senior Unsecured Notes, 2.900% due 2050 | |||
Stated interest rate | 2.90% | ||
Maturity Date | Jun. 15, 2050 | ||
Unsecured Debt | $ 642,000,000 | 641,000,000 | |
Term Loan | |||
Maturity Date | Nov. 10, 2023 | ||
Long-term Debt | $ 0 | $ 400,000,000 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021Rate | Jun. 30, 2020Rate | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax [Abstract] | ||||
Effective income tax rate reconciliation, percent | 10.60% | 4.60% | 13.10% | 18.50% |
Segment Information (Sales And
Segment Information (Sales And Other Financial Information By Business Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 4,294 | $ 2,764 | $ 8,247 | $ 6,352 |
Segment operating income | 732 | (20) | 1,191 | 615 |
Amortization of intangible assets | (149) | (110) | (330) | (228) |
Recall-related matters | (76) | 0 | (82) | 6 |
Orthopaedics | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,628 | 894 | 3,112 | 2,116 |
MedSurg | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,748 | 1,324 | 3,369 | 2,946 |
Neurotechnology and Spine | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 918 | 546 | 1,766 | 1,290 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 4,294 | 2,764 | 8,247 | 6,352 |
Segment operating income | 1,265 | 475 | 2,355 | 1,474 |
Operating Segments | Orthopaedics | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,628 | 894 | 3,112 | 2,116 |
Segment operating income | 511 | 163 | 927 | 555 |
Operating Segments | MedSurg | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,748 | 1,324 | 3,369 | 2,946 |
Segment operating income | 441 | 237 | 986 | 634 |
Operating Segments | Neurotechnology and Spine | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 918 | 546 | 1,766 | 1,290 |
Segment operating income | 313 | 75 | 442 | 285 |
Corporate and other | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating income | (154) | (130) | (316) | (267) |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Acquisition and integration-related charges | (120) | (19) | (369) | (56) |
Amortization of intangible assets | (149) | (110) | (330) | (228) |
Restructuring-related and other charges | (17) | (209) | (31) | (263) |
Medical device regulations | (26) | (22) | (45) | (46) |
Recall-related matters | (76) | 0 | (82) | 6 |
Regulatory and legal matters | $ 9 | $ (5) | $ 9 | $ (5) |
Asset Impairments (Details)
Asset Impairments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Asset impairments | $ 189 | $ 3 | $ 161 |
Risks and Uncertainties (Detail
Risks and Uncertainties (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unusual Risk or Uncertainty [Line Items] | |||||
Asset impairments | $ 189 | $ 3 | $ 161 | ||
Concentration risk, geographic (as a percent) | 2 | ||||
Forecast | |||||
Unusual Risk or Uncertainty [Line Items] | |||||
Asset impairments | $ 100 |