Stryker (SYK) 10-K risk factor changes: FY2020 vs FY2019

[added: Words that identify] forward-looking statements include words such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," "goal," "strategy" and words and terms of similar substance used in connection with any discussion of future operating or financial performance, an acquisition or our businesses.

In December [removed: 2017,] [added: 2017] the Tax Cuts and Jobs Act of 2017 was signed into law in the United States.

There have been ongoing [removed: judicial] [added: litigation] and congressional efforts to modify or repeal all or certain provisions of the ACA.

We cannot predict what other healthcare programs and regulations will ultimately be implemented at the federal or state level or the effect [added: of any future legislation or regulation in the United States may have on our business.]

| Dollar amounts in millions except per share amounts or as otherwise specified. | [removed: 3] | [added: | 4 | | |]

STRYKER CORPORATION [removed: 2019] [added: 2020] FORM 10-K

We are subject to extensive governmental regulation relating to the classification, manufacturing, labeling, marketing and sale of our products: The classification, manufacturing, [added: sterilization,] labeling, marketing and sale of our products are subject to extensive and evolving regulations and rigorous regulatory enforcement by the FDA, European Union (EU), the [removed: National Medical Products Administration (NMPA)] [added: NMPA] in China, and other governmental authorities in the United States and internationally.

Costs to comply with regulations, including the EU Medical Device Regulation enacted by the EU in May 2017 and effective in May [removed: 2020,] [added: 2021, the free trade agreement recently executed between the UK] and the [added: EU that became effective January 1, 2021, and the] regulatory laws established by the NMPA in China, and costs associated with remediation can be significant.

We are subject to federal, state and foreign healthcare regulations, including [removed: anti-bribery] [added: anti-bribery, anti-corruption, anti-kickback] and [removed: anti-corruption] [added: false claims] laws, [added: globally] and could face substantial penalties if we fail to comply with such regulations and laws: The relationships that we, and [removed: third parties] [added: third-parties] that market and/or sell our products, have with healthcare professionals, such as physicians, [removed: hospitals and other] [added: hospitals,] healthcare [removed: organizations,] [added: organizations and others,] are subject to scrutiny under various state and federal laws often referred to collectively as healthcare [removed: fraud and abuse laws.]

In addition, the United States and foreign government regulators have increased the enforcement of the Foreign Corrupt Practices Act (FCPA) and other anti-bribery [added: and anti-kickback] laws.

We also must comply with a variety of other laws that impose extensive tracking and reporting related to all transfers of value provided to certain healthcare [removed: professionals.][added: professionals and others.]

In 2013 and 2018 we settled claims brought by the [added: United States] Securities and Exchange Commission (SEC) related to the FCPA.

[removed: Pursuant to these settlements, we paid fines and penalties, and we] [added: We] are working [removed: with an independent compliance consultant] to implement recommendations that resulted from the independent compliance consultant’s review of our commercial practices.

We are subject to [added: privacy,] data [removed: privacy and] protection [added: and data security] regulations and laws globally, and could face substantial penalties if we fail to comply with such regulations and laws: We are subject to a variety of laws and regulations globally regarding privacy, data protection, and data security, including those related to the collection, storage, handling, use, disclosure, transfer, and security of personally identifiable healthcare information.

[removed: For example, Europe’s] [added: Further, the EU’s] General Data Protection Regulation (GDPR), which became effective in May 2018, applies to all of our activities related [added: to products and services that we offer to EU customers and employees.]

We are currently defendants in a number of product liability matters, including those relating to our Rejuvenate and ABGII Modular-Neck hip [removed: stems and] [added: stems,] LFIT Anatomic CoCr V40 Femoral Heads [added: and the product liability lawsuits and claims relating to Wright legacy hip products] discussed in Note 7 to our Consolidated Financial Statements.

These matters are subject to many uncertainties and [removed: outcomes are not predictable.]

We have exposure to exchange rate fluctuations on cross border transactions and translation of local currency results into United States Dollars: We report our financial results in United States Dollars and approximately 30% of our net sales are denominated in foreign currencies, including the Australian Dollar, British Pound, [added: Canadian Dollar,] Euro and Japanese Yen.

In addition, the weakening or strengthening of the United States Dollar results in favorable or unfavorable translation [added: effects when the results of our foreign locations are translated into United States Dollars.]

| Dollar amounts in millions except per share amounts or as otherwise specified. | [removed: 4] | [added: | 5 | | |]

Additional capital that we may require in the future may not be available to us or may only be available to us on unfavorable [removed: terms:] [added: terms, which could negatively affect our liquidity:] Our future capital requirements will depend on many factors, including operating requirements, current and future acquisitions and the need to refinance existing debt.

Our ability to issue additional debt or enter into other financing arrangements on acceptable terms could be adversely affected by our debt levels, unfavorable changes in economic conditions or uncertainties that affect the capital [removed: markets.][added: markets, including disruption caused by the COVID-19 pandemic.]

[removed: Higher] borrowing costs or the inability to access capital markets could adversely affect our ability to support future growth and operating requirements.

If we are unable to maintain these relationships, our ability to develop, market and sell new and improved products could be [added: further] adversely affected.

Our ability to continue to market, distribute, and sell our products may be at risk if the indirect channels [added: become insolvent,] choose to sell competitive products, choose to stop selling medical technology, or are subject to new or additional government [removed: regulation.][added: regulation, whether related to the COVID-19 pandemic or for unrelated reasons.]

[added: Our global operations are subject to risks and potential costs, including] changes in [added: reimbursement, changes in] regulatory requirements, differing local product preferences and product requirements, diminished protection of intellectual property in some countries, tariffs and other trade protection measures, international trade disputes and import or export requirements, difficulty in staffing and managing foreign operations, introduction of new internal business structures and programs, [removed: and] political and economic instability (such as the United Kingdom's exit from the European Union, commonly referred to as [removed: "Brexit").][added: "Brexit"), and disruptions of transportation due to a global pandemic of contagious diseases like COVID-19 or otherwise, such as reduced availability of transportation, port closures, increased border controls or closures, increased transportation costs and increased security threats to our supply chain.]

[removed: If completed,] [added: We may be unable to capitalize on] the [added: Wright acquisition: The] success of the Wright acquisition will depend, in part, on our ability to successfully combine and integrate Wright into our businesses and realize the anticipated benefits, including synergies, from the transaction.

The integration of Wright into Stryker may result in material challenges, including: the diversion of management’s attention from ongoing business concerns and performance shortfalls at one or both of the companies; [added: blending the cultures of Stryker and Wright;] maintaining employee morale and retaining key management, sales and other employees; retaining existing business and operational relationships; the possibility of faulty assumptions underlying expectations regarding the integration process; consolidating corporate and administrative infrastructures and eliminating duplicative operations; unanticipated issues in integrating information technology, communications and other systems; [added: continuing the regular] and [removed: unforeseen costs, expenses] [added: uninterrupted cadence of product launches;] and [removed: liabilities (including litigation related liabilities) associated with the acquisition.][added: unforeseen]

| Dollar amounts in millions except per share amounts or as otherwise specified. | [removed: 5] | [added: | 6 | | |]

We could be negatively impacted by future changes in the allocation of income to each of the income [removed: tax jurisdictions] [added: tax jurisdictions] in which we operate: We operate in multiple income tax jurisdictions both in the United States and internationally.

[removed: Income tax] authorities regularly perform audits of our income tax filings.

Orthopaedics has principal manufacturing and distribution facilities in the United States in Florida, [removed: Indiana,] [added: Georgia, Minnesota,] New [removed: Jersey] [added: Jersey, Tennessee] and Virginia and outside the United States in China, France, Germany, [removed: Ireland, Netherlands, Switzerland,] [added: Ireland] and [removed: the United Kingdom.][added: Switzerland.]

MedSurg has principal manufacturing and distribution facilities in the United States in Arizona, California, Florida, Illinois, [removed: Indiana,] Michigan, Puerto Rico, Texas and Washington and outside the United States in France, Germany, Ireland, Mexico, [removed: Switzerland, Turkey,] [added: Switzerland] and [removed: the United Kingdom.][added: Turkey.]

Neurotechnology and Spine has principal manufacturing and distribution facilities in [removed: California,] Illinois, [removed: Indiana,] Utah and Virginia and outside the United States in China, France, [removed: Ireland,] [added: Ireland] and Switzerland.

Damage to our facilities, to our suppliers’ [added: or service providers'] facilities, or to our central distribution centers in Indiana and the Netherlands as a result of natural disasters or otherwise, as well as issues in our manufacturing arising from a failure to follow specific internal protocols and procedures, compliance concerns relating to the quality systems regulation, equipment breakdown or malfunction, environmental hazard incidents or changes to environmental regulations or other factors, could adversely affect the availability of our products.

In the event of a significant interruption, we may experience lengthy delays in resuming production of affected products due to the need for regulatory [removed: approvals.][added: approvals, and we may experience loss of market share, additional expense and harm to our reputation.]

| Dollar amounts in millions except per share amounts or as otherwise specified. | [removed: 6] | [added: | 7 | | |]

COVID-19 PANDEMIC RISKS

The COVID-19 pandemic has materially adversely affected, and could continue to materially adversely affect, our operations, supply chain, manufacturing, product distribution and other business activities: The global COVID-19 pandemic has led to severe disruptions in the market and the United States and international economies that may continue for a prolonged duration and trigger a recession or a period of economic slowdown.

In response, various governmental authorities and private enterprises have implemented, and may continue to implement, numerous measures to contain the pandemic, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.

A significant number of our global suppliers, vendors, distributors and manufacturing facilities are located in regions that have been affected by the pandemic and those operations have been, and could continue to be, materially affected by restrictive government measures implemented in response to the pandemic.

As a result, some of our distributors and indirect channels have at times been unable to distribute our products or provide required services.

Any delay or shortage in the supply of components or materials or delay in delivering our products may result in our inability to satisfy consumer demand for our products in a timely manner or at all, which could harm our reputation, future sales and profitability.

In addition, the pandemic could adversely impact our ability to retain key employees and the continued service and availability of skilled personnel necessary to run our complex productions, as well as our executive officers and other members of our management team, third-party suppliers, manufacturers, distributors and vendors.

To the extent our management or other personnel are impacted in significant numbers by the pandemic and are not available to perform their job duties, we could experience delays in, or the suspension of, our manufacturing operations, research and product development activities, regulatory work streams, clinical development programs and other important commercial functions.

Moreover, the actions we take to mitigate the effect of the pandemic on our workforce could reduce the efficiency of our operations or prove insufficient.

Further, our relationships with our employees may be disrupted due to the cost-saving and other measures implemented in response to the COVID-19 pandemic, including employee furloughs, which could result in increased employment litigation and claims for severance or other benefits tied to terminations or furloughs or attempts to unionize portions of our workforce.

The extent of the pandemic’s effect on our business will depend on future developments, including the duration, spread and intensity of the pandemic and the successful development, distribution and acceptance of vaccines for COVID-19, all of which are uncertain and difficult to predict.

We are not able at this time to estimate with certainty the effect of these and other unforeseen factors on our business, but the adverse impact on our business, cash flows, financial condition and results of operations could be material.

A prolonged impact of COVID-19 also could heighten many of the other risks described in this report.

We have experienced, and may continue to experience, a significant and unpredictable need to adjust our operations as market demand for certain of our products has shifted and continues to shift or as may be mandated by

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governmental authorities in response to the COVID-19 pandemic: Some of our products are particularly sensitive to reductions in elective medical procedures.

Elective medical procedures were suspended, especially in the first and fourth quarters of 2020 and the first quarter of 2021, in many of the markets where our products are marketed and sold, which negatively affected our business, cash flows, financial condition and results of operations.

It is not possible to predict the exact timing of a broad resumption of elective medical procedures and, to the extent individuals are required to continue to de-prioritize, delay or cancel elective procedures as a result of the COVID-19 pandemic or otherwise, our business, cash flows, financial condition and results of operations could be negatively affected.

In addition, our products in certain divisions, such as Medical, have experienced, and could continue to experience, higher demand as our customers focus on treating COVID-19 patients.

Unpredictable increases in demand for certain of our products could exceed our capacity to meet such demand timely, which could adversely affect our customer relationships and result in negative publicity.

In this regard, the accelerated development and production of products and services in an effort to address medical and other requirements as a result of the pandemic could increase the risk of regulatory enforcement actions, product defects or related claims.

Further, in an effort to increase the wider availability of needed medical and other supplies and products in response to the pandemic, governments may require us (such as under the United States Defense Production Act) to allocate manufacturing capacity in a way that adversely affects our regular operations, results in differential treatment of customers and/or adversely affects our reputation and customer relationships.

It is also possible that certain of our operations are deemed non-essential and thus subject to suspension or other restrictions by government orders.

We cannot predict how these changes in operations, if implemented, would affect our future operations and commercial activities as the impact of the pandemic begins to subside.

Income tax

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STRYKER CORPORATION 2020 FORM 10-K

fraud and abuse laws.

Pursuant to these settlements, we paid fines and penalties and retained an independent compliance consultant.

For example, in the United States, privacy and security regulations under the Health Insurance Portability and Accountability Act of 1996, including the expanded requirements under the Health Information Technology for Economic and Clinical Health Act of 2009, establish comprehensive standards with respect to the use and disclosure of protected health information (PHI), by covered entities, in addition to setting standards to protect the confidentiality, integrity and security of PHI.

We may be exposed to additional potential product liability risks related to products designed, manufactured and marketed in response to the COVID-19 pandemic, including discretionary products and products permitted under the Emergency Use Authorization granted by the FDA.

outcomes are not predictable.

Further, in November 2020 the European Parliament voted in favor of the European Representative Actions Directive (the Collective Redress Directive), which mandates a class action regime in each member state to facilitate domestic and cross-border class actions in a wide range of areas, including product liability claims with medical devices.

The Collective Redress Directive will take effect in 2023 after a 24-month implementation period.

The Collective Redress Directive, when implemented, could result in additional litigation risks and significant legal expenses for us.

Higher

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| --- | --- | --- | --- | --- | --- |

Words that identify

Among other things, the ACA imposed a 2.3 percent excise tax on medical devices that applies only to United States sales, which are a majority of our medical device sales.

Congress suspended the excise tax for 2016 and 2017 and the suspension was once again upheld in January 2018 for two years.

In December 2019, the excise tax was permanently repealed.

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of any future legislation or regulation in the United States may have on our business.

to products and services that we offer to EU customers and employees.

We are self-insured for product liability-related claims and expenses.

effects when the results of our foreign locations are translated into United States Dollars.

Our global operations are subject to risks and potential costs, including changes in reimbursement,

We may be unable to close the Wright Medical acquisition or, if the acquisition does close, to capitalize on it: The completion of the acquisition of Wright Medical Group N.V. (Wright) is subject to a number of conditions.

The failure to satisfy all of the required conditions, including the receipt of required regulatory clearances, could delay the completion of the transaction for a significant period of time or prevent it from occurring at all.

Any delay in completing the transaction could cause us not to realize some or all of the expected benefits of the transaction or to realize them on a different timeline than expected.

In addition, the terms and conditions of the required regulatory clearances for the acquisition may impose requirements, limitations or costs that may materially delay the completion of the transaction or could materially adversely affect the expected benefits of the transaction.

Any breach by us of the acquisition agreement could also subject us to material liabilities related to the transaction.

We may incur goodwill impairment charges related to one or more of our business units: We perform our annual impairment test for goodwill in the fourth quarter of each year, or more frequently if indicators are present or changes in circumstances suggest that

impairment may exist.

In evaluating the potential for impairment we make assumptions regarding revenue projections, growth rates, cash flows, tax rates and discount rates.

These assumptions are uncertain and by nature may vary from actual results.

A significant reduction in the estimated fair values could result in impairment charges.

We may experience loss of market share, additional expense and harm to our reputation.

Excluding the impact of acquisitions, sales [removed: grew 8.1%] [added: declined 4.8%] in constant currency.

We reported net earnings of [removed: $2,083] [added: $1,599] and net earnings per diluted share of [removed: $5.48.][added: $4.20.]

Excluding the impact of certain items, we achieved adjusted net [removed: earnings] [added: earnings(1)] of [removed: $3,139] [added: $2,827] and [removed: growth of 13.0% in] adjusted net earnings per diluted [removed: share(1).][added: share(1) of $7.43 representing a decline of 10.0%.]

We continued our capital allocation strategy by investing [removed: $802] [added: $4,222] in [removed: acquisitions,] [added: acquisitions and] paying [removed: $778] [added: $863] in dividends to our [removed: shareholders and using $307 for share repurchases.][added: shareholders.]

In [removed: 2019] [added: 2020] we completed acquisitions for total net cash consideration of [removed: $802] [added: $4,222] and [removed: $294] [added: $82] in future milestone payments primarily due upon the achievement of certain regulatory and commercial milestones.

In November [removed: 2019] [added: 2020] we [removed: announced a definitive agreement to acquire all of] [added: completed] the [removed: issued and outstanding ordinary shares] [added: acquisition] of Wright [removed: Medical Group N.V. (Wright)] for $30.75 per share, or an aggregate purchase price of [removed: approximately $5.4] [added: $4.1] billion [removed: (including] [added: ($5.6 billion including] convertible notes).

[removed: Following closing, we plan to integrate] Wright [removed: into] [added: is part of] our Trauma and Extremities business within Orthopaedics.

In [removed: 2019] [added: 2020] we [removed: repurchased 1.9 million] [added: did not repurchase any] shares of our common stock [removed: at a cost of $307] under our authorized repurchase program.

The total dollar value of shares of our common stock that could be acquired under our authorized repurchase program was $1,033 as of December 31, [removed: 2019.][added: 2020.]

| | | | | | | | | | | | [added: | | | |] Percent Net Sales | | | | | | | [added: | | | | |] Percentage Change | | | | [added: | |]

| [added: 2020 | | |] 2019 | | | 2018 | | | [removed: 2017] | | | [added: 2020] | [added: | |] 2019 | | [added: |] 2018 | | [removed: 2017] | | | [added: |] Current Year End | | [added: |] Prior Year End | | | [added: | | |]

| Net sales | [added: | |] $ | [removed: 14,884] [added: 14,351] | | $ | [removed: 13,601] [added: 14,884] | | $ | [removed: 12,444] [added: 13,601] | | | [added: | |] 100.0 | [added: |] % | 100.0 | [added: |] % | 100.0 | [added: |] % | | [removed: 9.4] | [added: | (3.6) | |] % | [removed: 9.3] [added: 9.4] | [added: |] % |

| Gross profit | [added: | | 9,057 | | |] 9,696 | | | 8,938 | | | [removed: 8,180] | | | [added: 63.1] | [added: | |] 65.1 | | [added: |] 65.7 | | [removed: 65.7] | | | [removed: 8.5] | [added: (6.6)] | [removed: 9.3] | | [added: 8.5 | | |]

| Research, development and engineering expenses | [added: | | 984 | | |] 971 | | | 862 | | | [removed: 787] | | | [added: 6.9] | [added: | |] 6.5 | | [added: |] 6.3 | | [removed: 6.3] | | | [removed: 12.6] | [added: 1.3] | [removed: 9.5] | | [added: 12.6 | | |]

| Selling, general and administrative expenses | [added: | | 5,361 | | |] 5,356 | | | 5,099 | | | [removed: 4,552] | | | [added: 37.4] | [added: | |] 36.0 | | [added: |] 37.5 | | [removed: 36.6] | | | [removed: 5.0] | [added: 0.1] | [removed: 12.0] | | [added: 5.0 | | |]

| Recall charges, net of insurance proceeds | [added: | | 17 | | |] 192 | | | 23 | | | [removed: 173] | | | [added: 0.1] | [added: | |] 1.3 | | [added: |] 0.2 | | [removed: 1.4] | | | [removed: nm] | [added: (91.1)] | [added: | |] nm | | [added: |]

| Amortization of intangible assets | [added: | | 472 | | |] 464 | | | 417 | | | [removed: 371] | | | [added: 3.3] | [added: | |] 3.1 | | [added: |] 3.1 | | [removed: 3.0] | | | [removed: 11.3] | [added: 1.7] | [removed: 12.4] | | [added: 11.3 | | |]

| Other income (expense), net | [removed: (151] | | [removed: )] [added: (269)] | [removed: (181] | | [removed: )] [added: (151)] | [removed: (234] | | [removed: )] [added: (181)] | | [removed: (1.0] | [removed: )] | [removed: (1.3] | [removed: )] | [removed: (1.9] [added: (1.9)] | [removed: )] | | [removed: (16.6] [added: (1.0)] | [removed: )] | [removed: (22.6] | [removed: )] [added: (1.3)] | [added: | | | | | 78.1 | | | (16.6) | | |]

| Income taxes | [added: | | 355 | | |] 479 | | | [removed: (1,197] [added: (1,197)] | | [removed: )] | [removed: 1,043] | | | | | | | | | | | [removed: nm] | | [added: | | (25.9) | | |] nm | | [added: |]

| Net earnings | [added: | |] $ | [added: 1,599 | | $ |] 2,083 | | $ | 3,553 | | [removed: $] | [removed: 1,020] | | [added: 11.1] | [added: | % |] 14.0 | [added: |] % | 26.1 | [added: |] % | [removed: 8.2] | [removed: %] | | [removed: (41.4] [added: (23.2)] | [removed: )%] | [removed: 248.3] [added: %] | [added: (41.4) | |] % |

| Net earnings per diluted share | [added: | |] $ | [added: 4.20 | | $ |] 5.48 | | $ | 9.34 | | [removed: $] | [removed: 2.68] | | | | | | | | | | [removed: (41.3] | [removed: )%] | [removed: 248.5] | [added: | (23.4) | |] % | [added: (41.3) | | % |]

| Adjusted net earnings per diluted share(1) | [added: | |] $ | [added: 7.43 | | $ |] 8.26 | | $ | 7.31 | | [removed: $] | [removed: 6.49] | | | | | | | | | | [removed: 13.0] | [added: | | | (10.0) | |] % | [removed: 12.6] [added: 13.0] | [added: |] % |

| Geographic and Segment Net Sales | | | | | | | | | | | [added: | | | |] Percentage Change | | | | | | | | | [added: | | | | | |]

| | | | | | | | | | | [added: | |] Current Year End | | | | | [added: | | | |] Prior Year End | | | | | [added: | | | |]

| | [added: | | 2020 | | |] 2019 | | | 2018 | | | [removed: 2017] | | | [removed: |] As Reported | | [added: |] Constant Currency | | | [added: | | |] As Reported | | [added: |] Constant Currency | | [added: |]

| Geographic: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| United States | [added: | |] $ | [added: 10,455 | | $ |] 10,957 | | $ | 9,848 | | [removed: $] | [removed: 9,059] | | [added: (4.6)] | [removed: 11.3] | % | [removed: 11.3] [added: (4.6)] | [added: |] % | | [removed: 8.7] | [added: | 11.3 | |] % | [removed: 8.7] [added: 11.3] | [added: |] % |

| International | [added: | | 3,896 | | |] 3,927 | | | 3,753 | | | [removed: 3,385] | | | [added: (0.8)] | [removed: 4.6] | | [removed: 9.3] [added: (0.9)] | | | [removed: 10.9] | | [removed: 9.7] | [added: 4.6] | [added: | | 9.3 | | |]

| Total | [added: | |] $ | [added: 14,351 | | $ |] 14,884 | | $ | 13,601 | | [removed: $] | [removed: 12,444] | | [added: (3.6)] | [removed: 9.4] | % | [removed: 10.7] [added: (3.6)] | [added: |] % | | [removed: 9.3] | [added: | 9.4 | |] % | [removed: 9.0] [added: 10.7] | [added: |] % |

| Segment: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Orthopaedics | [added: | |] $ | [added: 4,959 | | $ |] 5,252 | | $ | 4,991 | | [removed: $] | [removed: 4,713] | | [added: (5.6)] | [removed: 5.2] | % | [removed: 6.7] [added: (5.7)] | [added: |] % | | [removed: 5.9] | [added: | 5.2 | |] % | [removed: 5.4] [added: 6.7] | [added: |] % |

| Neurotechnology and Spine | [removed: 3,058] | | [added: 2,992] | [added: | | 3,140 | | |] 2,565 | | | [removed: 2,174] | | | [added: (4.7)] | [removed: 19.2] | | [removed: 20.5] [added: (4.9)] | | | [removed: 18.0] | | [removed: 17.4] | [added: 19.2] | [added: | | 20.5 | | |]

| Dollar amounts in millions except per share amounts or as otherwise specified. | [removed: 9] | [added: | 11 | | |]

STRYKER CORPORATION [removed: 2019] [added: 2020] FORM 10-K

| Supplemental Net Sales Growth Information | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| | | | | | | | [added: | |] Percentage Change | | | | | | | | | | | | | | | | | [added: | | | | | | |] Percentage Change | | | | | | | | | | [added: | | | | |]

| | | | | | | | | | | | [added: | | | |] United States | | [added: |] International | | | | | | | | | | | | | | | [added: | | | | | |] United States | | [added: |] International | | | | [added: | |]

| | [removed: 2019] | | [added: 2020] | [removed: 2018] | | [added: 2019] | [added: | |] As Reported | | [added: |] Constant Currency | | [added: |] As Reported | | [added: |] As Reported | | [added: |] Constant Currency | | | [removed: 2018] | | | [removed: 2017] [added: 2019] | | | [added: 2018 | | |] As Reported | | [added: |] Constant Currency | | [added: |] As Reported | | [added: |] As Reported | | [added: |] Constant Currency | | [added: |]

| Orthopaedics: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| Knees | [added: | |] $ | [removed: 1,815] [added: 1,567] | | $ | [removed: 1,701] [added: 1,815] | | [removed: 6.7] [added: (13.7)] | [added: |] % | [removed: 8.1] [added: (13.7)] | [added: |] % | [removed: 8.2] [added: (13.1)] | [added: |] % | [removed: 2.6] [added: (15.3)] | [added: |] % | [removed: 7.6] [added: (15.5)] | [added: |] % | | [added: | |] $ | [removed: 1,701] [added: 1,815] | | $ | [removed: 1,595] [added: 1,701] | | [removed: 6.6] [added: 6.7] | [added: |] % | [removed: 6.3] [added: 8.1] | [added: |] % | [removed: 6.4] [added: 8.2] | [added: |] % | [removed: 7.3] [added: 2.6] | [added: |] % | [removed: 5.7] [added: 7.6] | [added: |] % |

About Stryker

Stryker is one of the world's leading medical technology companies and, together with our customers, we are driven to make healthcare better.

We offer innovative products and services in Orthopaedics, Medical and Surgical, and Neurotechnology and Spine that help improve patient and hospital outcomes.

COVID-19 Pandemic

The COVID-19 global pandemic has led to severe disruptions in the market and the global and United States economies that may continue for a prolonged duration and trigger a recession or a period of economic slowdown.

In response, various governmental authorities and private enterprises have implemented numerous measures to contain the pandemic, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.

A significant number of our global suppliers, vendors, distributors and manufacturing facilities are located in regions that have been affected by the pandemic.

Those operations have been materially adversely affected by restrictive government and private enterprise measures implemented in response to the pandemic.

Some of our products are particularly sensitive to reductions in elective medical procedures.

Elective medical procedures were suspended in the first quarter of 2020 in many of the markets where our products are marketed and sold, which negatively affected our business, cash flows, financial condition and results of operations.

While we saw progressive improvement in the second and third quarters, to the extent individuals are required to continue to de-prioritize or delay elective procedures as a result of the COVID-19 pandemic or otherwise, as we experienced in the fourth quarter, our business, cash flows, financial condition and results of operations could be negatively affected.

Overview of 2020

The response to the COVID-19 pandemic has included unprecedented measures to slow the spread of the virus taken by local governments and health care authorities globally, including

the postponement of elective medical procedures and social contact restrictions, which have had, and could continue to have, a significant negative impact on Stryker’s operations and financial results.

In 2020 reported net sales declined 3.6%.

In 2020 we received $3,292 from issuance of debt and had total debt repayments of $2,297.

We exercised our right under the acquisition clause of our credit and term loan facilities to increase the maximum permitted leverage to 5.0:1 effective as of December 31, 2020.

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.

We previously announced our intention to suspend our share repurchase program through 2021.

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| MedSurg | | | 6,400 | | | 6,492 | | | 6,045 | | | | | | (1.4) | | | (1.3) | | | | | | 8.8 | | | 9.9 | | |

| Total | | | $ | 14,351 | | $ | 14,884 | | $ | 13,601 | | | | | (3.6) | | % | (3.6) | | % | | | | 9.4 | | % | 10.7 | | % |

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| Instruments | | | $ | 1,863 | | $ | 1,959 | | (5.0) | | % | (5.0) | | % | (4.7) | | % | (6.1) | | % | (6.2) | | % | | | | $ | 1,959 | | $ | 1,822 | | 12.0 | | % | 13.1 | | % | 12.9 | | % | 8.7 | | % | 13.8 | | % |

| Sustainability | | | 250 | | | 286 | | | (12.3) | | | (12.3) | | | (12.4) | | | nm | | | nm | | | | | | 286 | | | 259 | | | 10.4 | | | 10.4 | | | 9.9 | | | nm | | | nm | | |

| | | | $ | 6,400 | | $ | 6,492 | | (1.4) | | % | (1.3) | | % | (2.9) | | % | 4.7 | | % | 5.3 | | % | | | | $ | 6,492 | | $ | 6,045 | | 8.8 | | % | 9.9 | | % | 10.8 | | % | 1.3 | | % | 6.5 | | % |

| Neurotechnology | | | $ | 1,945 | | $ | 1,983 | | (1.9) | | % | (2.1) | | % | (7.7) | | % | 8.8 | | % | 8.2 | | % | | | | $ | 1,983 | | $ | 1,737 | | 13.5 | | % | 14.9 | | % | 13.9 | | % | 12.7 | | % | 16.7 | | % |

| Spine | | | 1,047 | | | 1,157 | | | (9.5) | | | (9.6) | | | (12.5) | | | (0.6) | | | (0.9) | | | | | | 1,157 | | | 828 | | | 31.1 | | | 32.3 | | | 34.7 | | | 21.3 | | | 25.4 | | |

| | | | $ | 2,992 | | $ | 3,140 | | (4.7) | | % | (4.9) | | % | (9.6) | | % | 6.1 | | % | 5.6 | | % | | | | $ | 3,140 | | $ | 2,565 | | 19.2 | | % | 20.5 | | % | 21.3 | | % | 14.9 | | % | 18.9 | | % |

Consolidated net sales in 2020 were significantly negatively impacted by the global response to the COVID-19 pandemic.

Consolidated net sales decreased 3.6% as reported and in constant currency.

Overview of 2019

In 2019 we achieved reported net sales growth of 9.4%.

In January 2019 we repaid $500 of our senior unsecured notes with a coupon of 1.800% that were due on January 15, 2019.

In March 2019 we repaid $750 of our senior unsecured notes with a coupon of 2.000% that were due on March 8, 2019.

In December 2019 we issued €2.4 billion senior unsecured notes comprised of €850 of senior unsecured notes with a coupon of 0.250% due December 3, 2024, €800 of senior unsecured notes with a coupon of 0.750% due March 1, 2029 and €750 of senior unsecured notes with a coupon of 1.000% due December 3, 2031.

In January 2020 we repaid $500 of senior unsecured notes with a coupon of 4.375% that were due on January 15, 2020.

We expect the acquisition to close in the second half of 2020, subject to the expiration of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of other required approvals and clearances under applicable antitrust laws, the adoption of certain resolutions by Wright’s shareholders and other customary conditions.

See Note 6 to our Consolidated Financial Statements for further information.

When we issued the €2.4 billion of senior unsecured notes we also announced our intention to suspend our share repurchase program in 2020 and 2021.

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| MedSurg | 6,574 | | | 6,045 | | | 5,557 | | | | 8.8 | | 9.9 | | | 8.8 | | 8.7 | |

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| Instruments | $ | 2,041 | | $ | 1,822 | | 12.0 | % | 13.1 | % | 12.9 | % | 8.7 | % | 13.8 | % | | $ | 1,822 | | $ | 1,678 | | 8.6 | % | 8.4 | % | 9.2 | % | 6.4 | % | 6.0 | % |

| Sustainability | 286 | | | 259 | | | 10.4 | | 10.4 | | 9.9 | | nm | | nm | | | 259 | | | 258 | | | 0.4 | | 0.1 | | — | | 100.0 | | 19.5 | |

| | $ | 6,574 | | $ | 6,045 | | 8.8 | % | 9.9 | % | 10.8 | % | 1.3 | % | 6.5 | % | | $ | 6,045 | | $ | 5,557 | | 8.8 | % | 8.7 | % | 8.4 | % | 10.2 | % | 10.0 | % |

| Neurotechnology | $ | 1,973 | | $ | 1,737 | | 13.5 | % | 14.9 | % | 13.9 | % | 12.7 | % | 16.7 | % | | $ | 1,737 | | $ | 1,423 | | 22.1 | % | 21.4 | % | 23.9 | % | 18.9 | % | 17.2 | % |

| Spine | 1,085 | | | 828 | | | 31.1 | | 32.3 | | 34.7 | | 21.3 | | 25.4 | | | 828 | | | 751 | | | 10.3 | | 9.9 | | 6.9 | | 20.8 | | 19.1 | |

| | $ | 3,058 | | $ | 2,565 | | 19.2 | % | 20.5 | % | 21.3 | % | 14.9 | % | 18.9 | % | | $ | 2,565 | | $ | 2,174 | | 18.0 | % | 17.4 | % | 17.3 | % | 19.4 | % | 17.6 | % |

MedSurg net sales in 2018 increased 8.8% as reported and 8.7% in constant currency, as foreign currency exchange rates positively impacted net sales by 0.1%.

Excluding the 1.4% impact of acquisitions and the 1.3% impact from the adoption of ASC 606(2), net sales increased in constant currency by 9.3% from increased unit volume partially offset by 0.7% due to lower prices.

Excluding the 7.4% impact of acquisitions and the 0.6% impact from adoption of ASC 606(2), net sales in constant currency increased by 12.2% from increased unit volume partially offset by 1.6% due to lower prices.

(2) We adopted Accounting Standards Update 2014-09, *Revenue From Contracts with Customers*, as well as related amendments (ASC 606), issued by the Financial Accounting Standards Board on a modified retrospective basis, effective January 1, 2018.

Refer to Note 1 and Note 2 to our Consolidated Financial Statements for further information on our revenue recognition policies and disclosures.

Gross profit in 2018 as a percentage of net sales of 65.7% was consistent with 2017.

Excluding the impact of the items noted below, gross profit decreased to 66.1% from 66.4% in 2017 primarily due to the impact of adopting ASC 606(2) and by lower selling prices.

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Selling, general and administrative expenses as a percentage of net sales in 2018 increased to 37.5% from 36.6% in 2017.

Excluding the impact of the items noted below, expenses decreased to 33.9% in 2018 from 34.8% in 2017 primarily due to leverage from higher sales volumes, the favorable impact from the adoption of ASC 606 and continued focus on our operating expense improvement initiatives, partially offset by the leverage from recent acquisitions.

The decrease in 2019 was primarily due to an increase in interest income due to higher interest rates partially offset by higher interest expense due to higher interest rates and higher debt outstanding.

The effective income tax rate for 2017 reflects compliance with the Tax Act offset by lower effective income tax rates as a result of our European operations.

| Reported | $ | 8,180 | | $ | 4,552 | | $ | 787 | | $ | 2,297 | | $ | (234 | ) | $ | 1,020 | | 50.6 | % | $ | 2.68 | |

| Adjusted | $ | 8,259 | | $ | 4,334 | | $ | 787 | | $ | 3,138 | | $ | (217 | ) | $ | 2,465 | | 15.6 | % | $ | 6.49 | |

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We sell our products globally and, as a result, our financial results could be significantly affected by factors such as [added: market risk exposure from] weak economic [removed: conditions or changes in foreign currency] [added: conditions,] exchange [removed: rates.][added: rate risk and the impacts of the COVID-19 pandemic on our operations and financial results.]

Our operating results are primarily exposed to changes in exchange rates among the United States Dollar, [removed: European currencies, in particular the Euro, Swiss Franc and the] [added: Australian Dollar,] British Pound, [removed: the Japanese Yen, the Australian Dollar and the] Canadian [removed: Dollar.][added: Dollar, Euro and Japanese Yen.]

[added: We develop and manufacture products in the United States, Canada,] China, France, Germany, Ireland, Japan, Mexico, Puerto Rico, [removed: Sweden,] Switzerland and Turkey and incur costs in the applicable local currencies.

A hypothetical 10% change in foreign currencies relative to the United States Dollar would change the December 31, [removed: 2019] [added: 2020] fair value of these instruments by approximately [removed: $523.][added: $550.]

We are not able to quantify the impacts of the COVID-19 pandemic on our financial results.

Qualitative disclosures about the COVID-19 pandemic are included in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Part I, Item 1A "Risk Factors" of this Form 10-K.

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| Dollar amounts in millions except per share amounts or as otherwise specified. | | | 18 | | |

STRYKER CORPORATION 2020 FORM 10-K

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We develop and manufacture products in the United States, Canada,

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[removed: ][added: ]

Our products are sold in over 75 countries through company-owned subsidiaries and branches, as well as third-party dealers and distributors, and include implants used in joint replacement and trauma surgeries; [added: Mako Robotic-Arm Assisted technology;] 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.

| Net Sales by Reportable Segment | | | | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| | [removed: 2019] | | [added: 2020] | | | | [removed: 2018] | | | | | [added: 2019] | [removed: 2017] | | | | | [added: | | | 2018 | | | | | |]

| Orthopaedics | [added: | |] $ | [removed: 5,252] [added: 4,959] | | [removed: 35] [added: 34] | [added: |] % | | [added: | |] $ | [removed: 4,991] [added: 5,252] | | [removed: 37] [added: 35] | [added: |] % | | [added: | |] $ | [removed: 4,713] [added: 4,991] | | [removed: 38] [added: 37] | [added: |] % |

| Neurotechnology and Spine | [removed: 3,058] | | [added: 2,992] | [added: | |] 21 | | | [removed: 2,565] | | | [removed: 19] [added: 3,140] | | | [removed: 2,174] [added: 21] | | | [removed: 17] | | [added: | 2,565 | | | 19 | | |]

| Total | [added: | |] $ | [removed: 14,884] [added: 14,351] | | 100 | [added: |] % | | [added: | |] $ | [removed: 13,601] [added: 14,884] | | 100 | [added: |] % | | [added: | |] $ | [removed: 12,444] [added: 13,601] | | 100 | [added: |] % |

Orthopaedics products consist primarily of implants used in [removed: hip and knee] [added: total] joint [removed: replacements] [added: replacements, such as hip, knee] and [added: shoulder, and] trauma and extremities surgeries.

We bring patients and physicians [removed: advanced implant designs and]

[added: advanced implant designs and] specialized instrumentation that make orthopaedic surgery and recovery simpler, faster and more effective.

Mako is the only robotic-arm assisted technology enabled by 3D CT-based pre-operative planning, and with AccuStop™ haptic technology, Mako provides surgeons [removed: intra-operative haptic guidance for] [added: the ability to know more about their patients' anatomy so they can cut less in] bone preparation and implant [removed: placement.][added: placement with intra-operative haptic guidance.]

Stryker is one of four leading global competitors for joint replacement and trauma and extremities [removed: products;] [added: products and robotics;] the other three being Zimmer Biomet Holdings, Inc. (Zimmer), DePuy Synthes (a Johnson & Johnson company) and Smith & Nephew plc (Smith & Nephew).

| Composition of Orthopaedics Net Sales | | | | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| Knees | [added: | |] $ | [removed: 1,815] [added: 1,567] | | [removed: 35] [added: 32] | [added: |] % | | [added: | |] $ | [removed: 1,701] [added: 1,815] | | [removed: 34] [added: 35] | [added: |] % | | [added: | |] $ | [removed: 1,595] [added: 1,701] | | 34 | [added: |] % |

| Hips | [removed: 1,383] | | [added: 1,206] | [removed: 26] | | [added: 24] | [removed: 1,336] | | | [removed: 27] | | [added: 1,383] | [removed: 1,303] | | [added: 26] | [removed: 28] | | [added: | | | 1,336 | | | 27 | | |]

| Trauma and Extremities | [removed: 1,639] | | [removed: | 31] [added: 1,722] | | | [removed: 1,580] [added: 35] | | | [removed: 32] | | | [removed: 1,478] [added: 1,639] | | | 31 | | [added: | | | | 1,580 | | | 32 | | |]

| Other | [removed: 415] | | [added: 464] | [removed: 8] | | [added: 9] | [removed: 374] | | | [removed: 7] | | [added: 415] | [removed: 337] | | [added: 8] | [added: | | | | | 374 | | |] 7 | | [added: |]

| Total | [added: | |] $ | [removed: 5,252] [added: 4,959] | | 100 | [added: |] % | | [added: | |] $ | [removed: 4,991] [added: 5,252] | | 100 | [added: |] % | | [added: | |] $ | [removed: 4,713] [added: 4,991] | | 100 | [added: |] % |

MedSurg products include surgical [removed: equipment] [added: equipment, patient] and [added: caregiver safety technologies, and] navigation systems (Instruments), endoscopic and communications systems (Endoscopy), patient handling, emergency medical equipment and intensive care disposable products (Medical), reprocessed and remanufactured medical devices (Sustainability) and other medical device products used in a variety of medical specialties.

| Composition of MedSurg Net Sales | | | | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| Endoscopy | [removed: 1,983] | | [added: 1,763] | [removed: 30] | | [added: 28] | [removed: 1,846] | | | [added: | | 1,983 | | |] 31 | | | [removed: 1,652] | | | [removed: 30] [added: 1,846] | | [added: | 31 | | |]

| Medical | [removed: 2,264] | | [added: 2,524] | [removed: 34] | | [added: 39] | [removed: 2,118] | | | [added: | | 2,264 | | |] 35 | | | [removed: 1,969] | | | [added: 2,118 | | |] 35 | | [added: |]

| Sustainability | [removed: 286] | | [added: 250] | [removed: 5] | | [added: 4] | [removed: 259] | | | [added: | | 286 | | |] 4 | | | [removed: 258] | | | [removed: 5] [added: 259] | | [added: | 4 | | |]

| Total | [added: | |] $ | [removed: 6,574] [added: 6,400] | | 100 | [added: |] % | | [added: | |] $ | [removed: 6,045] [added: 6,492] | | 100 | [added: |] % | | [added: | |] $ | [removed: 5,557] [added: 6,045] | | 100 | [added: |] % |

| Dollar amounts in millions except per share amounts or as otherwise specified. | [added: | |] 1 | [added: | |]

STRYKER CORPORATION [removed: 2019] [added: 2020] FORM 10-K

Neurotechnology and Spine products include neurosurgical, neurovascular, [added: craniomaxillofacial] and spinal implant devices.

Our spinal implant offering includes [removed: cervical,] [added: cervical and] thoracolumbar [added: systems that include fixation, minimally invasive,] and interbody systems used in spinal injury, [removed: deformity] [added: complex spine] and degenerative therapies.

| Composition of Neurotechnology and Spine Net Sales | | | | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| Total | [added: | |] $ | [removed: 3,058] [added: 2,992] | | 100 | [added: |] % | | [added: | |] $ | [removed: 2,565] [added: 3,140] | | 100 | [added: |] % | | [added: | |] $ | [removed: 2,174] [added: 2,565] | | 100 | [added: |] % |

In [removed: 2019] [added: 2020] Stryker received [removed: Food and Drug Administration (FDA) pre-market approval (PMA)] [added: FDA PMA] of its Neuroform Atlas™ Stent System for the treatment of wide-neck intracranial aneurysms in [removed: conjunction] [added: conjuction] with embolic detachable coils in the [removed: anterior] [added: posterior] circulation of the neurovasculature.

In [removed: 2018] [added: 2020] Stryker received [removed: FDA PMA] [added: Food and Drug Administration (FDA) pre-market approval (PMA)] for the [added: next generation] Surpass [removed: Streamline™] [added: Evolve™] Flow Diverter to treat unruptured large and giant [removed: wide neck] [added: wide-neck] intracranial aneurysms.

In addition, the EU enacted the EU Medical Device Regulation (EU MDR) in May 2017 with an effective date of May [removed: 2020,] [added: 2021,] which imposes stricter requirements for the marketing and sale of medical devices, including in the areas of clinical evaluation requirements, quality systems, labeling and post-market surveillance.

Finally, we are required to comply with the unique regulatory requirements of each [removed: of the countries in Europe and other countries, including China, in] [added: country within] which we market [added: and sell] our [removed: products.][added: products, including China, whose National Medical Products Administration (NMPA) has recently promulgated more stringent regulatory requirements.]

| Dollar amounts in millions except per share amounts or as otherwise specified. | [added: | |] 2 | [added: | |]

| Name | [added: | |] Age | [added: | |] Title | [added: | |] First Became an Executive Officer | [added: | |]

| Kevin A. Lobo | [removed: 54] | [added: | 55 | | |] Chairman and Chief Executive Officer | [added: | |] 2011 | [added: | |]

| Yin C. Becker | [removed: 56] | [added: | 57 | | |] Vice President, Communications, Public Affairs and Corporate Marketing | [added: | |] 2016 | [added: | |]

| William E. Berry Jr. | [removed: 54] | [added: | 55 | | |] Vice President, Corporate Controller and Principal Accounting Officer | [added: | |] 2014 | [added: | |]

| Glenn S. Boehnlein | [removed: 58] | [added: | 59 | | |] Vice President, Chief Financial Officer | [added: | |] 2016 | [added: | |]

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| MedSurg | | | 6,400 | | | 45 | | | | | | 6,492 | | | 44 | | | | | | 6,045 | | | 44 | | |

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| | | | 2020 | | | | | | | | | 2019 | | | | | | | | | 2018 | | | | | |

In 2020 we completed the acquisition of Wright Medical Group N.V. (Wright) for an aggregate purchase price of $4.1 billion ($5.6 billion including convertible notes).

Wright develops, manufactures and markets a complementary product portfolio of surgical solutions for upper extremities (shoulder, elbow, wrist and hand), lower extremities (foot and ankle) and biologics.

The Wright acquisition enhances our global market position in trauma and extremities, providing opportunities to advance innovation and reach more patients.

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| | | | 2020 | | | | | | | | | 2019 | | | | | | | | | 2018 | | | | | |

| Instruments | | | $ | 1,863 | | 29 | | % | | | | $ | 1,959 | | 30 | | % | | | | $ | 1,822 | | 30 | | % |

In 2020 Instruments launched a new system of corded power tools for conducting small bone orthopaedic procedures and Zipline Medical (2019 acquisition) single use, surgical site closure devices that are utilized across multiple procedures, including orthopaedic arthroplasty, where it provides improved outcomes.

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In 2020 Medical launched the ProCuity Bed Series, connected and scalable beds for all patient care environments with wireless and advanced fall prevention technologies, the first smart bed series to market.

The Craniomaxillofacial implant offering includes cranial, maxillofacial, and chest wall devices as well as dural substitutes and sealants.

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| | | | 2020 | | | | | | | | | 2019 | | | | | | | | | 2018 | | | | | |

| Neurotechnology | | | $ | 1,945 | | 65 | | % | | | | $ | 1,983 | | 63 | | % | | | | $ | 1,737 | | 68 | | % |

| Spine | | | 1,047 | | | 35 | | | | | | 1,157 | | | 37 | | | | | | 828 | | | 32 | | |

In addition, Stryker received China National Medical Products Administration (NMPA) approval for the Surpass Streamline™ Flow Diverter.

These two devices further expand our commercial footprint into the global flow diversion market.

The Neuroform Atlas™ device was previously approved for the anterior circulation.

Neuroform Atlas™ Stent System has also been approved and has launched in China.

Also in 2020 Stryker launched the next generation Trevo product and line extensions of numerous Access products.

On December 31, 2020 we owned approximately 4,045 United

States patents and approximately 6,407 patents in other countries.

The dollar amount of customer backlog orders at any given time is not meaningful to an understanding of our business taken as a whole.

More recently, a free trade agreement was executed between the UK and the EU that became effective January 1, 2021.

A gap analysis and compliance plan is being implemented to ensure compliance and minimize business

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STRYKER CORPORATION 2020 FORM 10-K

disruption.

On December 31, 2020 we had approximately 43,000 employees globally, with approximately 24,000 employees in the United States.

Our talented employees are an integral reason for our standing as one of the world's leading medical technology companies where, together with our customers, we are driven to make healthcare better.

Our company values of integrity, accountability, people and performance are a key component of that mission.

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| MedSurg | 6,574 | | | 44 | | | 6,045 | | | 44 | | | 5,557 | | | 45 | |

| Instruments | $ | 2,041 | | 31 | % | | $ | 1,822 | | 30 | % | | $ | 1,678 | | 30 | % |

In 2019 Instruments acquired SafeAir AG, a Swiss medical device company dedicated to the design, development and manufacture of innovative surgical smoke evacuation solutions.

The company's smoke evacuation products help reduce staff and patient exposure to hazards associated with surgical smoke.

Instruments also acquired TSO3, a Quebec City developer of sterilization processes, related consumable supplies and accessories utilized in sterile hospital environments that offer an advantageous replacement solution to other low temperature sterilization processes.

In 2019 Endoscopy launched the 1688 Advanced Imaging Modalities platform, the next generation of its flagship visualization technology with 4K image quality and ICG fluorescence overlay.

The 1688, coupled with the SPY-PHI portable handheld imager, delivers a standardized system for a multitude of minimally invasive and open surgical procedures.

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| Neurotechnology | $ | 1,973 | | 65 | % | | $ | 1,737 | | 68 | % | | $ | 1,423 | | 65 | % |

| Spine | 1,085 | | | 35 | | | 828 | | | 32 | | | 751 | | | 35 | |

The Neuroform Atlas™ device was previously approved under a humanitarian device exemption, which restricted use to specific hospitals with institutional review board approval.

PMA was granted based on robust clinical trial evidence proving the efficacy of the device.

The device was the second flow diverting stent to gain FDA approval in the United States, expanding our commercial footprint into the flow diversion market and reinforcing our commitment to complete stroke care for patients suffering from cerebrovascular disease.

Stryker’s next generation flow diverting stent, Surpass Evolve™, received CE mark approval in 2019.

On December 31, 2019 we owned approximately 3,392 United States patents and approximately 5,491 international patents.

On December 31, 2019 we had approximately 40,000 employees globally.

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| As of January 31, 2020 | | | |

| Katherine A. Owen | 49 | Vice President, Strategy and Investor Relations | 2007 |

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[removed: FORM 10-K][added: FORM 10-K]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year ended December 31, [removed: 2019][added: 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

[removed: ][added: ]

| Michigan | | | | | | [added: | | | | | | | | | | | |] 38-1239739 | [added: | |]

| (State of incorporation) | | | | | | [added: | | | | | | | | | | | |] (I.R.S. Employer Identification No.) | [added: | |]

| 2825 Airview Boulevard, | | [added: | | | |] Kalamazoo, | | [added: | | | |] Michigan | | [added: | | | |] 49002 | [added: | |]

| (Address of principal executive offices) | | | | | | [added: | | | | | | | | | | | |] (Zip Code) | [added: | |]

| | | | [added: | | | | | |] (269) | [added: | |] 385-2600 | | | [added: | | | | | |]

| (Registrant’s telephone number, including area code) | | | | | | | [added: | | | | | | | | | | | | | |]

| Securities registered pursuant to Section 12(b) of the Act: | | | [added: | | | | | |]

| Title of each class | [added: | |] Trading Symbol(s) | [added: | |] Name of each exchange on which registered | [added: | |]

| Common Stock, $.10 Par Value | [added: | |] SYK | [added: | |] New York Stock Exchange | [added: | |]

| 1.125% Notes due 2023 | [added: | |] SYK23 | [added: | |] New York Stock Exchange | [added: | |]

| 0.250% Notes due 2024 | [added: | |] SYK24A | [added: | |] New York Stock Exchange | [added: | |]

| 2.125% Notes due 2027 | [added: | |] SYK27 | [added: | |] New York Stock Exchange | [added: | |]

| 0.750% Notes due 2029 | [added: | |] SYK29 | [added: | |] New York Stock Exchange | [added: | |]

| 2.625% Notes due 2030 | [added: | |] SYK30 | [added: | |] New York Stock Exchange | [added: | |]

| 1.000% Notes due 2031 | [added: | |] SYK31 | [added: | |] New York Stock Exchange | [added: | |]

Securities registered pursuant to Section 12(g) of the [removed: Act: None][added: Act: None]

| Large accelerated filer | [added: | |] ☒ | [added: | |] Accelerated filer | [added: | |] ☐ | [added: | |] Emerging growth company | [added: | |] ☐ | [added: | |]

| Non-accelerated filer | [added: | |] ☐ | [added: | |] Small reporting company | [added: | |] ☐ | | | [added: | | | | | |]

The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately [removed: $71,863,352,935] [added: $63,413,151,504] at June 30, [removed: 2019.][added: 2020.]

There were [removed: 374,575,145] [added: 376,200,942] shares outstanding of the registrant’s common stock, $0.10 par value, on January 31, [removed: 2020.][added: 2021.]

Portions of the proxy statement to be filed with the U.S. Securities and Exchange Commission relating to the [removed: 2020] [added: 2021] Annual Meeting of Shareholders (the [removed: 2020] [added: 2021] proxy statement) are incorporated by reference into Part III.

STRYKER CORPORATION [removed: 2019] [added: 2020] FORM 10-K

| Item 1. | [added: | |] Business | [removed: [1](#s45B97D78CE515CD383088D872CB2716F)] | [added: | [1](#i98b02bddd9044e2cafeb19d9c324afdc_13) | | |]

| Item 1A. | [added: | |] Risk Factors | [removed: [3](#s516C8EEF05EF5C2E95ADDB30A3D500E6)] | [added: | [4](#i98b02bddd9044e2cafeb19d9c324afdc_16) | | |]

| Item 1B. | [added: | |] Unresolved Staff Comments | [removed: [7](#sB3AE441BF476588F8F7465813DE5DB0C)] | [added: | [9](#i98b02bddd9044e2cafeb19d9c324afdc_19) | | |]

| Item 2. | [added: | |] Properties | [removed: [7](#s1278D06FE8AF54388B364FB18F84E2A3)] | [added: | [9](#i98b02bddd9044e2cafeb19d9c324afdc_22) | | |]

| Item 3. | [added: | |] Legal Proceedings | [removed: [7](#s61070DF9F146596186499D2C9D07370A)] | [added: | [9](#i98b02bddd9044e2cafeb19d9c324afdc_25) | | |]

| Item 4. | [added: | |] Mine Safety Disclosures | [removed: [7](#s3843F44543575F67BD9C8130779C47D2)] | [added: | [9](#i98b02bddd9044e2cafeb19d9c324afdc_28) | | |]

| PART [removed: II] [added: I] | | | [added: | | | | | |]

| Item 5. | [added: | |] Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | [removed: [7](#sE2F0D83D4D205276A84005379119CF8C)] | [added: | [9](#i98b02bddd9044e2cafeb19d9c324afdc_34) | | |]

| Item 6. | [added: | |] Selected Financial Data | [removed: [8](#s8A0086126ABA520BBCF120089DE6E232)] | [added: | [10](#i98b02bddd9044e2cafeb19d9c324afdc_37) | | |]

| Item 7. | [added: | |] Management’s Discussion and Analysis of Financial Condition and Results of Operations | [removed: [9](#s5ACA01C8C4C85EFA80EAD7DDA4120975)] | [added: | [11](#i98b02bddd9044e2cafeb19d9c324afdc_40) | | |]

| Item 7A. | [added: | |] Quantitative and Qualitative Disclosures About Market Risk | [removed: [16](#s154594553B795C9489DC057C1312E739)] | [added: | [18](#i98b02bddd9044e2cafeb19d9c324afdc_73) | | |]

| Item 8. | [added: | |] Financial Statements and Supplementary Data | [removed: [16](#s6585A1E0CA1658F9A47C52BDE8F0A998)] | [added: | [19](#i98b02bddd9044e2cafeb19d9c324afdc_76) | | |]

| | [added: | |] Report of Independent Registered Public Accounting Firm | [removed: [16](#s6585A1E0CA1658F9A47C52BDE8F0A998)] | [added: | [19](#i98b02bddd9044e2cafeb19d9c324afdc_76) | | |]

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STRYKER CORPORATION

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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STRYKER CORPORATION 2020 FORM 10-K

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STRYKER CORPORATION

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| Floating Rate Notes due 2020 | SYK20A | New York Stock Exchange |

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We have approximately [removed: 24] [added: 28] company-owned and [removed: 295] [added: 353] leased locations worldwide including [removed: 50] [added: 56] manufacturing locations.

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| PART II | [added: | |]

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On January 31, [removed: 2020] [added: 2021] there were [removed: 2,617] [added: 2,582] shareholders of record of our common stock.

We did not repurchase any shares in the three months ended December 31, [removed: 2019] [added: 2020] and the total dollar value of shares that could be acquired under our authorized repurchase program at December 31, [removed: 2019] [added: 2020] was $1,033.

[removed: We issued 213] [added: In the fourth quarter 2020 we did not issue] shares of our common stock [removed: in the fourth quarter of 2019] as performance incentive [removed: awards.][added: awards to employees.]

[removed: These] [added: When issued, these] shares [removed: were] [added: are] not registered under the Securities Act of 1933 based on the conclusion that the awards would not be events of sale within the meaning of Section 2(a)(3) of the Act.

The graph assumes $100 (not in millions) invested on December 31, [removed: 2014] [added: 2015] in our common stock and each of the indices.

[removed: ][added: ]

| Company / Index | [removed: 2014] | | [removed: |] 2015 | | | 2016 | | | 2017 | | | 2018 | | | 2019 | | | [added: 2020 | | |]

| Dollar amounts in millions except per share amounts or as otherwise specified. | [removed: 7] | [added: | 9 | | |]

STRYKER CORPORATION [removed: 2019] [added: 2020] FORM 10-K

As previously announced we intend to maintain the suspension of our share repurchase program through 2021.

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| Stryker Corporation | | | $ | 100.00 | | $ | 130.69 | | $ | 170.99 | | $ | 175.15 | | $ | 237.03 | | $ | 280.09 | |

| S&P 500 Index | | | $ | 100.00 | | $ | 111.96 | | $ | 136.40 | | $ | 130.42 | | $ | 171.49 | | $ | 203.04 | |

| S&P 500 Health Care Index | | | $ | 100.00 | | $ | 97.31 | | $ | 118.79 | | $ | 126.47 | | $ | 152.81 | | $ | 173.36 | |

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| Stryker Corporation | $ | 100.00 | | $ | 100.01 | | $ | 130.71 | | $ | 171.01 | | $ | 175.18 | | $ | 237.06 | |

| S&P 500 Index | $ | 100.00 | | $ | 101.38 | | $ | 113.51 | | $ | 138.29 | | $ | 132.23 | | $ | 173.86 | |

| S&P 500 Health Care Index | $ | 100.00 | | $ | 106.89 | | $ | 104.01 | | $ | 126.98 | | $ | 135.19 | | $ | 163.34 | |

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| Statement of Earnings Data | | [added: | | | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | | | [removed: 2017] | | [added: 2017] | | [removed: 2016] | | | | [removed: 2015] [added: 2016] | | |

| Net sales | | [added: | | | |] $ | [removed: 14,884] [added: 14,351] | | | [added: | |] $ | [removed: 13,601] [added: 14,884] | | | [added: | |] $ | [removed: 12,444] [added: 13,601] | | | [added: | |] $ | [removed: 11,325] [added: 12,444] | | | [added: | |] $ | [removed: 9,946] [added: 11,325] | |

| Cost of sales | | [added: | | | | 5,294 | | | | | |] 5,188 | | | | [added: | |] 4,663 | | | | [removed: 4,264] | | [added: 4,264] | | [removed: 3,821] | | | | [removed: 3,333] [added: 3,821] | | |

| Gross profit | | [added: | | | |] $ | [removed: 9,696] [added: 9,057] | | | [added: | |] $ | [removed: 8,938] [added: 9,696] | | | [added: | |] $ | [removed: 8,180] [added: 8,938] | | | [added: | |] $ | [removed: 7,504] [added: 8,180] | | | [added: | |] $ | [removed: 6,613] [added: 7,504] | |

| Research, development and engineering expenses | | [added: | | | | 984 | | | | | |] 971 | | | | [added: | |] 862 | | | | [removed: 787] | | [added: 787] | | [removed: 715] | | | | [removed: 625] [added: 715] | | |

| Selling, general and administrative expenses | | [added: | | | | 5,361 | | | | | |] 5,356 | | | | [added: | |] 5,099 | | | | [removed: 4,552] | | [added: 4,552] | | [removed: 4,137] | | | | [removed: 3,610] [added: 4,137] | | |

| Recall charges | | [added: | | | | 17 | | | | | |] 192 | | | | [added: | |] 23 | | | | [removed: 173] | | [added: 173] | | [removed: 158] | | | | [removed: 296] [added: 158] | | |

| Amortization of intangible assets | | [added: | | | | 472 | | | | | |] 464 | | | | [added: | |] 417 | | | | [removed: 371] | | [added: 371] | | [removed: 319] | | | | [removed: 210] [added: 319] | | |

| Total operating expenses | | [added: | | | |] $ | [removed: 6,983] [added: 6,834] | | | [added: | |] $ | [removed: 6,401] [added: 6,983] | | | [added: | |] $ | [removed: 5,883] [added: 6,401] | | | [added: | |] $ | [removed: 5,329] [added: 5,883] | | | [added: | |] $ | [removed: 4,741] [added: 5,329] | |

| Operating income | | [added: | | | |] $ | [removed: 2,713] [added: 2,223] | | | [added: | |] $ | [removed: 2,537] [added: 2,713] | | | [added: | |] $ | [removed: 2,297] [added: 2,537] | | | [added: | |] $ | [removed: 2,175] [added: 2,297] | | | [added: | |] $ | [removed: 1,872] [added: 2,175] | |

| Other income (expense), net | | [removed: (151] | | [removed: )] | | [removed: (181] [added: (269)] | | [removed: )] | | [removed: (234] | | [removed: )] [added: (151)] | | [removed: (254] | | [removed: )] | | [removed: (137] [added: (181)] | | [removed: )] | [added: | | | (234) | | | | | | (254) | | |]

| Earnings before income taxes | | [added: | | | |] $ | [removed: 2,562] [added: 1,954] | | | [added: | |] $ | [removed: 2,356] [added: 2,562] | | | [added: | |] $ | [removed: 2,063] [added: 2,356] | | | [added: | |] $ | [removed: 1,921] [added: 2,063] | | | [added: | |] $ | [removed: 1,735] [added: 1,921] | |

| Income taxes | | [added: | | | | 355 | | | | | |] 479 | | | | [removed: (1,197] | | [removed: )] [added: (1,197)] | | [removed: 1,043] | | | | [removed: 274] [added: 1,043] | | | | [removed: 296] | | [added: 274] | [added: | |]

| Net earnings | | [added: | | | |] $ | [removed: 2,083] [added: 1,599] | | | [added: | |] $ | [removed: 3,553] [added: 2,083] | | | [added: | |] $ | [removed: 1,020] [added: 3,553] | | | [added: | |] $ | [removed: 1,647] [added: 1,020] | | | [added: | |] $ | [removed: 1,439] [added: 1,647] | |

| Net earnings per share of common stock: | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Dividends declared per share of common stock | | [added: | | | |] $ | [removed: 2.135] [added: 2.355] | | | [added: | |] $ | [removed: 1.93] [added: 2.135] | | | [added: | |] $ | [removed: 1.745] [added: 1.93] | | | [added: | |] $ | [removed: 1.565] [added: 1.745] | | | [added: | |] $ | [removed: 1.415] [added: 1.565] | |

| Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Cash, cash equivalents and current marketable securities | | [added: | | | |] $ | [removed: 4,425] [added: 3,024] | | | [added: | |] $ | [removed: 3,699] [added: 4,425] | | | [added: | |] $ | [removed: 2,793] [added: 3,699] | | | [added: | |] $ | [removed: 3,384] [added: 2,793] | | | [added: | |] $ | [removed: 4,079] [added: 3,384] | |

| Accounts receivable, net | | [added: | | | | 2,701 | | | | | |] 2,893 | | | | [added: | |] 2,332 | | | | [removed: 2,198] | | [added: 2,198] | | [removed: 1,967] | | | | [removed: 1,662] [added: 1,967] | | |

| [removed: Inventories] [added: Inventories(1)] | | [removed: 3,282] | | | | [added: 3,494 | | | | | | 2,980 | | | | | |] 2,955 | | | | [removed: 2,465] | | [added: 2,465] | | [removed: 2,030] | | | | [removed: 1,639] [added: 2,030] | | |

| Property, plant and equipment, net | | [added: | | | | 2,752 | | | | | |] 2,567 | | | | [added: | |] 2,291 | | | | [removed: 1,975] | | [added: 1,975] | | [removed: 1,569] | | | | [removed: 1,199] [added: 1,569] | | |

| Total assets | | [added: | | | |] $ | [removed: 30,167] [added: 34,330] | | | [added: | |] $ | [removed: 27,229] [added: 30,167] | | | [added: | |] $ | [removed: 22,197] [added: 27,229] | | | [added: | |] $ | [removed: 20,435] [added: 22,197] | | | [added: | |] $ | [removed: 16,223] [added: 20,435] | |

| Accounts payable | | [added: | | | | 810 | | | | | |] 675 | | | | [added: | |] 646 | | | | [removed: 487] | | [added: 487] | | [removed: 437] | | | | [removed: 410] [added: 437] | | |

| Total debt | | [added: | | | | 13,991 | | | | | |] 11,090 | | | | [added: | |] 9,859 | | | | [removed: 7,222] | | [added: 7,222] | | [removed: 6,914] | | | | [removed: 3,998] [added: 6,914] | | |

| Shareholders’ equity | | [added: | | | |] $ | [removed: 12,807] [added: 13,084] | | | [added: | |] $ | [removed: 11,730] [added: 12,807] | | | [added: | |] $ | [removed: 9,980] [added: 11,730] | | | [added: | |] $ | [removed: 9,550] [added: 9,980] | | | [added: | |] $ | [removed: 8,511] [added: 9,550] | |

| Cash Flow Data | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Net cash provided by operating activities | | [added: | | | |] $ | [removed: 2,191] [added: 3,277] | | | [added: | |] $ | [removed: 2,610] [added: 2,191] | | | [added: | |] $ | [removed: 1,559] [added: 2,610] | | | [added: | |] $ | [removed: 1,915] [added: 1,559] | | | [added: | |] $ | [removed: 981] [added: 1,915] | |

| Purchases of property, plant and equipment | | [added: | | | | 487 | | | | | |] 649 | | | | [added: | |] 572 | | | | [removed: 598] | | [added: 598] | | [removed: 490] | | | | [removed: 270] [added: 490] | | |

| Depreciation | | [added: | | | | 340 | | | | | |] 314 | | | | [added: | |] 306 | | | | [removed: 271] | | [added: 271] | | [removed: 227] | | | | [removed: 187] [added: 227] | | |

| Acquisitions, net of cash acquired | | [added: | | | | 4,222 | | | | | |] 802 | | | | [added: | |] 2,451 | | | | [removed: 831] | | [added: 831] | | [removed: 4,332] | | | | [removed: 153] [added: 4,332] | | |

| Dividends paid | | [added: | | | | 863 | | | | | |] 778 | | | | [added: | |] 703 | | | | [removed: 636] | | [added: 636] | | [removed: 568] | | | | [removed: 521] [added: 568] | | |

| Repurchase of common stock | | [added: | | | | — | | | | | |] 307 | | | | [added: | |] 300 | | | | [removed: 230] | | [added: 230] | | [removed: 13] | | | | [removed: 700] [added: 13] | | |

| Other Data | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Number of shareholders of record | | [added: | | | | 2,597 | | | | | |] 2,636 | | | | [added: | |] 2,732 | | | | [removed: 2,850] | | [added: 2,850] | | [removed: 3,010] | | | | [removed: 3,118] [added: 3,010] | | |

| Approximate number of employees | | [added: | | | | 43,000 | | | | | |] 40,000 | | | | [removed: 36,000] | | [added: 36,000] | | [removed: 33,000] | | | | 33,000 | | | | [removed: 27,000] | | [added: 33,000] | [added: | |]

| Dollar amounts in millions except per share amounts or as otherwise specified. | [removed: 8] | [added: | 10 | | |]

STRYKER CORPORATION [removed: 2019] [added: 2020] FORM 10-K

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| Basic | | | | | | $ | 4.26 | | | | | $ | 5.57 | | | | | $ | 9.50 | | | | | $ | 2.73 | | | | | $ | 4.40 | |

| Diluted | | | | | | $ | 4.20 | | | | | $ | 5.48 | | | | | $ | 9.34 | | | | | $ | 2.68 | | | | | $ | 4.35 | |

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| Amortization of intangible assets | | | | | | 472 | | | | | | 464 | | | | | | 417 | | | | | | 371 | | | | | | 319 | | |

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(1) Loaner instrumentation not intended to be sold of $302 in 2019 has been reclassified from inventories to other noncurrent assets to conform with current year presentation.

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

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| Basic net earnings per share of common stock | | $ | 5.57 | | | $ | 9.50 | | | $ | 2.73 | | | $ | 4.40 | | | $ | 3.82 | |

| Diluted net earnings per share of common stock | | $ | 5.48 | | | $ | 9.34 | | | $ | 2.68 | | | $ | 4.35 | | | $ | 3.78 | |

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We have audited the accompanying consolidated balance sheets of Stryker Corporation and subsidiaries (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of earnings and comprehensive income, shareholders' equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February [removed: 6, 2020] [added: 11, 2021] expressed an unqualified opinion thereon.

| | [added: | |] Business Combinations | [added: | |]

| *Description of the Matter* | [added: | |] As described in Note 6 to the consolidated financial statements, [added: in 2020] the Company completed [removed: business combinations during 2019 for total consideration, net of cash acquired of $1,096 million. The most significant of these were (1)] the acquisition of all [removed: outstanding equity of OrthoSpace, Ltd. for total consideration, net of cash acquired of $208 million; and (2)] the [removed: acquisition of all] outstanding equity of [removed: Mobius Imaging and Cardan Robotics] [added: Wright Medical Group N.V. (Wright)] for total consideration, net of cash acquired of [removed: $473] [added: $4,081] million. The [removed: acquisitions were] [added: acquisition was] accounted for as [added: a] business [removed: combinations.] [added: combination.] The recognition, measurement and disclosure of the Company’s business [removed: combinations] [added: combination] in the [removed: 2019] [added: 2020] consolidated financial statements [added: and related footnote is preliminary and] was considered especially challenging and required significant auditor judgment due to the complex determination by management of the appropriate assumptions, such as discount rates, revenue growth rates, and [removed: projected] profit [removed: margins,] [added: margins] for the valuation of acquired [removed: assets and expected probabilities of key outcomes for the valuation of assumed liabilities, including, but not limited to,] [added: assets, including] developed [removed: technology and contingent consideration.] [added: technologies.] The Company used a discounted cash flow model to measure the developed [removed: technology and a probability weighted discounted cash flow approach to measure the contingent consideration.] [added: technologies.] | [added: | |]